garnet balance sheet 2012 - moneycontrol.comthe brief resume of directors seeking re-appointment :...

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2011-2012

GARNET CONSTRUCTION LTD.

BOARD OF DIRECTORS

SHRI KISHAN KUMAR KEDIA CHAIRMAN AND MANAGING DIRECTOR SHRI ARUN KUMAR KEDIA DIRECTOR - MARKETING SHRI SANJAY KUMAR KEDIA FINANCE DIRECTOR SHRI SANTOSH GINORIA DIRECTOR SHRI SHIROMANI CHAUHAN DIRECTOR SHRI ANIL PATEL DIRECTOR

AUDITORS SHANKARLAL JAIN & ASSOCIATES 12, ENGINEER BUILDING, 265, PRIBNCESS STREET, MUMBAI – 400 002.

BANKERS AXIS BANK LTD. ALLAHABAD BANK S. V. ROAD, S. V. ROAD, KANDIVALI (WEST), ANDHERI (WEST), MUMBAI 400 067. MUMBAI – 400 058.

REGISTERED OFFICE CORPORATE OFFICE 17, MILAP APARTMENTS, 401, LAXMI MALL,

S.V. ROAD, LAXMI IND. ESTATE, LINK ROAD, MALAD (WEST), ANDHERI (WEST), MUMBAI 400 064. MUMBAI – 400 053.

WORKS VILLAGE TALUKA

HONAD KHALAPUR, DIST. RAIGAD DHEKU KHALAPUR, DIST. RAIGAD KUMBHIVALI KHALAPUR, DIST. RAIGAD DHAMNI KHALAPUR, DIST. RAIGAD AMBIVALI KHALAPUR, DIST. RAIGAD KARLA MAVAL, DIST. PUNE

NOTICE

Notice is hereby given that the 20th

Annual General Meeting of the Members of GARNET CONSTRUCTION

LIMITED will be held on Friday, the 28th

September, 2012 at 10.00 a.m. at Ashish –1 Banquet, Land Mark Building, Link Road, Mid Chowky, Malad (West), Mumbai - 400 064, to transact the following business :

ORDINARY BUSINESS

1. To receive, consider and adopt the Audited Balance Sheet as at 31

st March, 2012, and the Profit & Loss

Account for the year ended on that date and the reports of Directors' and Auditors' thereof.

2. To appoint a Director in the place of Shri Kishan Kumar Kedia who retires by rotation and being eligible offers himself for re-appointment.

3. To appoint a Director in the place of Shri Santosh Ginoria who retires by rotation and being eligible offers

himself for re-appointment.

4. To appoint Auditor of the Company to hold office from the conclusion of this Annual General Meeting until the conclusion of the next Annual General Meeting of the Company and to fix their remuneration.

By order of the Board

For Garnet Construction Limited

Place : Mumbai Kishan Kumar Kedia

Dated : 20th

August, 2012 Chairman & Managing Director

Regd. Office : 17, Milap Apartment, S. V. Road, Malad (West), Mumbai – 400 064.

NOTES :

1. A MEMBER ENTITLED TO ATTEND AND VOTE IS ENTITLED TO APPOINT A PROXY TO

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

2. The register of Members and the Share Transfer Book will remain closed from 20

th September, 2012 to 28

th

September, 2012 (both days inclusive) for the purpose of ensuing Annual General Meeting.

3. Members are requested to notify any changes in their address quoting their folio number to the Company's share department.

4. Members/Proxies should bring the attendance slip duly filled in for attending the meeting.

5. Members are requested to bring their copies of the Annual Report at the Meeting.

6. A member desirous of getting any information on the accounts or operations of the Company is requested to

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

By order of the Board For Garnet Construction Limited


Dated :20th


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Details of Director Appointed /Seeking re-appointment in forthcoming Annual General Meeting : The brief resume of Directors seeking re-appointment :

1. Kishan Kumar Kedia (66)

Shri Kishan Kumar Kedia is instrumental person and promoter director of the Company highly experienced person and having tremendous knowledge of management and control of business. He hold Nil directorship in other companies.

2. Santosh Ginoria (50)

Shri Santosh Ginoria was appointed as non-promoter director since 2003 and thereafter he is rendering his valuable services to the Company in relation with marketing and other financial assistance to the Company.

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DIRECTORS' REPORT

Your Directors have pleasure in presenting to you the 20th

Annual Report together with the Audited

Statement of Accounts of the Company for the financial year ended 31st

March, 2012.

FINANCIAL RESULTS (Rs. In Lacs)

As on As on 31.03.2012 31.03.2011

Sales & other Income 826.28 368.66 Profit before Depreciation, Int. & Tax 378.74 69.84 Depreciation 32.93 25.39 Interest 198.00 147.06 Profit before Tax 147.81 (164.69) Provision for Taxation 16.65 62.08 Provision for Deferred Taxation 0.00 0.00 Profit After Tax 131.16 (226.77) Share Capital 1390.22 1390.22 Reserve & Surplus 4696.69 4565.53

DIVIDEND Due the losses your directors do not recommend any dividend for the year.

OPERATIONAL REVIEW During the year under review the Company has earned profit of Rs. 131.16 Lacs as against previous year losses of Rs. 226.77 Lacs, the same is due to good sales and better marketing of company projects besides there is substantial increased in sales figures compare to previous year, your Company able to generate profit. Further the construction sector is doing reasonable well, the same is additional factor for current year. However, the management is confident in achieving better result in coming financial year.

DIRECTORS Shri Kishan Kumar Kedia and Shri Santosh Ginoria, Directors are retire at the ensuing annual general meeting and offers themselves for re-appointment. You are requested to reappoint them.

FIXED DEPOSITS Your Company has not accepted any fixed deposit during the year under review which falls under the definition of Section 58 A of the Companies Act, 1956.

CORPORATE GOVERNANCE A separate section on Corporate Governance is included in the Annual Report and the certificates from the Company's Auditors confirming the compliances of conditions on Corporate Governance as stipulated in Listing Agreement is annexed thereto.

The Management discussion and analysis and the compliance of corporate governance are annexed to this report.

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AUDITORS

The Auditors M/s Shankarlal Jain & Associates, Chartered Accountants, retire at the ensuing Annual General Meeting and are eligible offer themselves for reappointment. You are requested to consider their reappointment for the next financial year and fix their remuneration.

The Specific notes forming part of the Accounts referred to in the Auditors' Report are self- explanatory and do not require any further elucidation.

DIRECTORS' RESPONSIBILITY STATEMENT

Your Director make the following statement to Section 217 (2AA) of the Companies Act, 1956 :

i. that in the preparation of Annual Accounts, the applicable accounting standards had been followed along with the proper explanation relating to material departures if any, further there is a change in accounting policy in relation with recognition of sales as well as income.

ii. that the Directors had selected such accounting policies and applied them consistently and made

judgements and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at the end of the Financial year and of the Profit & Loss of the Company for that period.

iii. that the Directors had taken proper and sufficient care for the maintenance of adequate accounting

records in accordance with the provisions of the Act so to prevent and detect fraud and other irregularities.

iv. that the Directors had prepared the accounts on a going concern basis.

LISTING FEES

The Company confirms that the Annual Listing Fees due to Bombay Stock Exchange Ltd., Mumbai Jaipur Stock Exchange, Jaipur for the Financial Year 2012 – 2013 has been paid, further during the year company has de-listed its securities form Ahmedabad Stock Exchange, Ahmedabad during the year, hence listing fees for current year is not applicable to Ahmedabad Stock Exchange.

CUSTODIAN CHARGES

The Company confirms that the Custodian Charges due to the National Securities Depository Ltd., and Central Depository Services (India) Ltd. have been paid for the financial year 2012-13 as applicable and payable as per the SEBI circular in this regard.

STATUTORY DISCLOSURES

A) Particulars of the employees of the Company pursuant to Section 217 (2A) of the Companies Act,

1956 is not required to be given as none of the employees of the Company drawn remuneration in excess of amount prescribed in the section.

B) Particulars required to be furnished by the Companies (Disclosure of particulars in the Report of Board of Directors) Rules, 1988:

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i) Part A and Part B relating to Conversion of Energy and technology Absorption are not applicable to the Company as your Company is not a manufacturing Company.

ii) Foreign Exchange Earning and Outgo :- The Company has incurred Rs. 2,36,977- towards the foreign traveling expenses during the year under review.

DELISTING OF SECURITIES

During the year under review Company has applied for voluntary delisting of its securities from Ahmedabad Stock Exchange and Jaipur Stock Exchange, in this regard compay has received the approval from Ahmedabad Stock Exchange, however approval from Jaipur Stock Exchange is awaiting at any movement.

ACKNOWLEDGEMENT

Your Directors thanks the banks, financial institutions for their valuable and timely financial assistance and support provided to the Company. Your Directors also thanks to the customers, suppliers, Government Institutions and others for the co-operation extended to the Company. The Board also places on record its appreciation for the assistance and co-operation received from staff and you the shareholders.

For and on behalf of the Board of Garnet Construction Limited


Dated : 20th


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ANNEXURE TO DIRECTOR'S REPORT

Corporate Governance Report

a. Company's philosophy on code of Governance

The Garnet Construction Ltd. believes that good corporate governance is essential to achieve long

term goals and also to enhance the shareholders value. The Company is engaged in construction

activity and rendering good quality of industrial as well as residential construction at Khopoli and

Lonavala to strive for continuos improvement in all other areas to create value that can sustain over a

long term for all its shareholders, employees, customers, government and others.

b. Board of Directors :

The Board of your Company consists of Six Directors including non-executive independent Director.

Your Company has an optimum combination of Executive and Non-Executive Directors with not less

than 50% of the Board of Directors comprising of Non-Executive Directors. All the members of the

Board are eminent with sound knowledge and background in different field.

The Board is headed by Shri Kishan Kumar Kedia. The non executive director constitutes more than

half of the total numbers of directors.

Board Meetings and procedure

The Board of Directors of your Company met Seventeen times during the year on 07.04.2011,

29.04.2011, 28.06.2011, 19.07.2011, 25.07.2011, 29.07.2011, 11.08.2011, 30.08.2011, 07.09.2011,

21.09.2011, 20.10.2011, 01.11.2011, 01.12.2011, 23.12.2011, 12.01.2012, 24.01.2012 and

30.03.2012. The details pertaining to the name and category of Directors on the Board, their

attendance at the Board Meetings held during the financial year 2011 – 12 and at the last Annual

General Meeting of the Company and the no. of Directorship on the Board or

membership/chairmanship in committee held by them across all the Companies are as under :

Name of Directors Position / Attended No. of other

Status Board Meeting Last AGM Directorship Committee Membership/

Chairmanship

Mr. Kishan Kumar Kedia ENI 17 Y - -

Mr. Arun Kedia ENI 17 Y 2 -

Mr. Sanjay Kedia ENI 17 Y 2 -

Mr. Santosh Ginoria NEI 7 Y - -

Mr. Shiromani Chauhan NEI 6 N - -

Mr. Anil Patel NEI 7 N - -

ENI = Executive Not Independent, NEI = Non-executive Independent Director

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c. Audit Committee

The Board of Directors has constituted Audit committee of Directors to exercise powers and discharge function as stipulated in Section 292A of the Companies Act, 1956 During the year four meetings were held on 29.04.2011, 29.07.2011, 20.10.2011 & 23.01.2012 and all the members had attended the meeting. The role and terms of reference of the audit committee covers the matter specified for audit committees under clause 49 of the listing agreement and provisions of Companies Act, 1956. Presently the committee comprises of three Directors and majority of them are independent Director.

The Composition of Audit Committee is as under :

S. No. Name of the members Status Director Status

1. Shiromani Chauhan Chairman Non-Executive & Independent

2. Santosh Ginoria Member Non-Executive & Independent

3. Anil Patel Member Non-Executive & Independent

Terms of reference:

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

Review of quarterly financial statement ensuring compliances with regulatory guidelines before

submission to the Board

Overseeing of the Company's financial reporting process and disclosure of financial information.

Preparation of various financial statement for better fund planning

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

Assistance in meeting financial requirement of the Company

Statement of significant related party transactions.

Remuneration Committee

The Board has not constituted any Remuneration Committee which is non mandatory however the details of remuneration paid to the Directors for the year 2011 – 12 are as under:

Managerial Remuneration :

Salary : Rs. 55,80,000

Commission : -

Other Perquisite : -

Total : Rs. 55,80,000

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d. Shareholders / Investors Grievance Committee

The Board has constituted a share transfer committee consisting of Mr. Kishan Kumar Kedia, Mr. Sanjay Kedia and Mr. Arun Kedia, and Mr. Arun Kedia is designated as Compliance Officer. As on

31st

March, 2012 there were no complaints pending and no share transfer pending for registration.

e. General Body Meeting Particulars of Last Three Annual General Meeting held are as follows :

AGM/EGM held Day, Date & Time Venue

AGM Thurs., 29.09.2011, 10.00 a.m. Ashish Banquet, Malad (West),

Mumbai – 400 064.

AGM Wednes., 29.09.2010, 10.00 a.m. Ashish Banquet, Malad (West), Mumbai – 400 064.

AGM Tuesday, 29.09.2009, 10.00 a.m. Ashish Banquet, Malad (West),

Mumbai – 400 064.

EGM Wednes., 21.01.2009, 10.00 a.m. Ashish Banquet, Malad (West), Mumbai – 400 064.

No special resolution were put through postal ballot last year and nor is there any proposal for this year. The postal ballot exercise shall be conducted from time to time of the provisions referred in respect of matters where applicable.

f. Disclosures

The related party transactions are furnished under the notes forming part of accounts.

There were no instances of non-compliance or penalty / strictures imposed on the Company by Stock Exchanges or SEBI or any statutory authority on any matter related to Capital Markets during the last three years.

g. Means of Communication

The quarterly results are published in the “Free Press House and Navshakti” newspapers. The Company will implement its own website and shortly it will display all the required information on its website.

Management discussion and analysis is a part of the Annual Report.

General Shareholders Information

1) AGM – Date, time and venue :

Date : 28th

September, 2012 Time : 10.00 a.m. Venue : Ashish – 1 Banquet, Land Mark Building, Link Road,

Mid Chowky, Malad (West), Mumbai – 400 064.

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2) Date of book closure from 20th

September, 12 to 28th

September, 12.(both days inclusive.)

3) Dividend payment date : not applicable since no dividend is recommended by the Board.

4) ISIN No. : INE797D01017

5) Reporting of Un-audited Financial Result : In respect of year 12 – 13

a) First quarter : Last week of July, 12

b) Second quarter : Last week of October, 12 c) Third quarter : Last week of January, 13 d) Fourth quarter : Last week of April, 13 e) Annual General Meeting (For 12 – 13) : By August / September, 13

6) Listing on Stock Exchanges: Bombay and Jaipur Stock Exchanges. The Company has received the delisting approval from Ahmedabad Stock Exchange during the year.

7) Stock Code : The Stock Exchange, Mumbai - 526727 The Stock Exchange, Jaipur - 497

8) Market Price Data – High/Low during the each month of the financial year 2011 – 2012 are as follows :

Month Bombay Stock Exchange Ltd.

High Low April 15.83 12.59 May 13.75 11.44 June 12.88 10.10 July 13.26 10.16 August 15.00 09.20 September 13.41 09.93 October 14.68 10.15 November 11.25 08.00 December 09.36 07.73 January 11.62 08.90 February 10.99 09.01 March 11.10 09.04

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

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

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

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11) Distribution of shareholding as on 31.03.2012

Share Holding of Nominal

Value

Share Holders Share Amount

No. % to Total In Rs. % to Total

0 5000 5496 84.53 9397340 6.76 5001 10000 506 7.78 4241870 3.05 10001 20000 244 3.75 3743510 2.69 20001 30000 65 1.00 1664270 1.20 30001 40000 33 0.51 1198510 0.86 40001 50000 43 0.66 2038780 1.47 50001 100000 47 0.72 3562880 2.56

100001 and Above 68 1.05 113174840 81.41 Total 6502 100 13,90,22,000 100

12) Shareholding pattern as on 31.03.2012

Category No. of Shares % of Shares

Promoter's Holding

Indian Promoters 5088123 36.60 Sub Total 5088123 36.60

Non-Promoters Others

Private Corporate Bodies 4577021 32.92 Indian Public 4066111 29.25 NRIs 134960 0.97 Clearing Member 35985 0.26

Sub Total 9374077 67.43 Grand Total 13902200 100

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

March, 2012

S. No. Name of the non-Executive Directors No. of Shares Held 1 Shri Shiromani Chauhan 1,000 2 Shri Santosh Ginoria 6,100 3 Shri Anil Patel Nil

14) Dematerialisation of shares: Appx. 63% of the share capital has been dematerialised as on 31st

March, 2012.

15) There is no instrument pending for conversion.

16) Site Location : Industrial Plot at Village – Honad, Dheku, Kumbhivali, Dhamni,

Ambivali, Taluka – Khalapur, Dist. – Raigad,

Residential Plot at Village – Karla, Dist. – Pune.

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Address for Correspondence :

• Shareholders holding shares in physical Mode are requested to lodge share transfer, transmission and intimate changes if any in their registered addresses, residential status etc. quoting their folio no to Company's Registrar and Share Transfer Agent.

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

Compliance :

This section of the report together with the information given under Management Discussion and Analysis and brief resume of Directors constituted a detailed report on Corporate Governance.

The Company has complied with Mandatory requirement of Corporate Governance. The Board would review implementation of Non – Mandatory Requirements of Corporate Governance Code in due course of time.

Auditors Certificates regarding compliances of conditions of corporate Governance is annexed to this report.


Date : 20

th August, 2012 Kishan Kumar Kedia

Place : Mumbai Chairman & Managing Director

Declaration on Compliance of the Company's Code of Conduct:

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


Date : 20th

August, 2012 Kishan Kumar Kedia Place : Mumbai Chairman & Managing Director

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CEO & CFO CERTIFICATION

The Board of Directors Garnet Construction Ltd. Mumbai

Re- Financial Statements for the year 2011-12 – Certification

We, Kishan Kumar Kedia, Chairman & Managing Director and Mr. Sanjay Kedia, Finance Director, on the basis of the review of the financial statements and the cash flow statement for the financial year ending March 31, 2012 and to the best of our knowledge and belief, thereby certify that: -

1. These statements do not contain any materially untrue statements or omit any material fact or

contains statements that might be misleading.

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

3. There are to the best of our knowledge and belief, no transaction entered into by the company

during the year ended March 31, 2012 which are fraudulent, illegal or violative of the Company's code of conduct.

4. We accept responsibility for establishing and maintaining internal controls for financial reporting,

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

5. We further certify that :

a) There have been no significant changes in the internal control over financial reporting during

this year.

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

c) There have been no instances of significant fraud of which we have become aware and the

involvement therein, of management or an employee having significant role in the Company's internal control systems over financial reporting.

Kishan Kumar Kedia Sanjay Kedia Chairman & Managing Director Finance Director

Place : Mumbai

Date : 20th

August, 2012

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MANAGEMENT DISCUSSIONS AND ANALYSIS

Introduction

Construction Industry is a booming industry and remain so with the continuation of the development

process especially in the developing countries. With the process of development, the migration of people

takes place from the rural to urban areas. This phenomenon is most significantly observed in the “Asian

Tiger” counties, China and India. Thus, the Construction Industry is also on a rise in such countries.

Despite the hullabaloo against slow pace of reforms, in 2012, a part (Infrastructure Construction

Industry) of the Indian economy is gearing up for large investments. There is only one direction to go-

ahead! but yes the concerns are around speed! However hope is still on and it's better to participate in this

growth story (even if it's moving slowly) than to miss the bus for what could be a huge opportunity for

businesses.

Investment in the infrastructure sector plays a crucial role in the growth of the economy and in turn the

construction industry. In the last few years, the rapid growth of the economy has put a tremendous

pressure on the physical infrastructure of the country. In order to sustain the economic growth, the

government has lined up huge investments across various infrastructure segments. The total investment

planned in the infrastructure sector during the Twelfth Five Year Plan is estimated to double that in the

Eleventh Five Year Plan.

Industry Structure & Development

Investment in the infrastructure as a percentage of GDP has increased from 4.5% in FY04 to 7.9% in

FY11. The Planning Commission has estimated that, for the GDP to continue to grow at 9%, the

proportion of investment in infrastructure as a percentage of GDP is required to increase from the

targeted 8.4% in FY12 to 10.7 % by the terminal year of Twelfth Five Year Plan i.e. FY17.

Apart from infrastructure projects, the construction industry also receives orders from different

manufacturing industries to execute construction work for industrial plants and related civil

construction. The construction industry had been benefiting from the rise in industrial production in the

past few years. As on June 30, 2011, the total outstanding investment in the industrial sector stood at

about Rs.35, 000 bn. Omitting the investment which is already under implementation from the total

outstanding investment, CARE Research estimates the effective construction investment of more than

Rs.4,200 bn during the next 4-5 years period.

Even though, the construction opportunity from both infrastructure and industrial sectors looks

immense; order inflow in the near term is likely to be affected due to slowdown in capex cycle and

awarding of infrastructure projects by the government.

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Company Projects, Company Opportunities and Threats

The Company's various projects under the different phases are as under :-

1. Magic Life

We are happy to introduce you with our new project called MAGIC LIFE, where we have 380 lavishly

designed bungalows with all the modern amenities, which is located near Mumbai Pune Express

Highway. Here, you get an excellent opportunity to choose a Bungalow with or without Swimming Pool.

Location is just 15-20 minutes drive from the Navi Mumbai International Airport

2. Magic Heaven

Once again we are delighted to introduce you to a new upcoming and very promising development. Magic

Heaven consists of 9 individual buildings, 7 storey's each, comprising of one and half, two and three

bedroom residential apartments and commercial units.

3. Magic Hills

Just on the outskirts of Mumbai, but still strategically connected to the metro by road and rail is village

Ambivali. Although the place is bit distanced from the metro hustle-bustle, it provides the right

ambience for a comfortable lifestyle. Moreover the location is adjacent to Navi Mumbai airport,

Chowk Rail station and the Express highway. Considering its strategic location, we earmarked it for

our prestigious housing complex.

4. Garnet PALADIUM

Garnet PALADIUM is a commercial project located at Goregaon (E), behind Express Zone is a quality

office space development in the country's financial capital, Mumbai, the construction at project is

going on and company is expecting the next it ready with the project.

As per the top-down approach, the investment in the infrastructure sector during the Twelfth Five Year

Plan is estimated at a massive Rs.41, 000 bn. Based on construction intensity of the various

infrastructure projects and similar allocation among sectors during the Eleventh Five Year Plan, the

indicative effective construction investment is estimated at a whopping Rs.20,000 bn during the

Twelfth Five Year Plan.

The major threats for this sector is slow down of industrial growth and reduction in property prices,

higher bank / financial institutions interest rates are major threats for the industry. Beside availability

of fund, global crises and another major political changes will also effect this sector. Further the

movement of Stock Market is also play a vital role in property market, beside any major changes by the

Government in relation with its policy decision.

However, the Company is confident in its sells planning coupled with its existing relation and quality

driven project, which helps the Company to out come from all kind of crises and trouble situations,

however any major changes can effect the financial condition of the Company.

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Segmentwise Performance and reporting

The Company is engaged in construction and sale of industrial as well residential plots only, hence the segment wise performance is not applicable. Financial Performance of the Company for the year under review has already covered under the Directors' Report.

Cautionary Statement

Statements in this report describing the Company's objectives, estimates and expectations may constitute “forward looking statements” within the meaning of applicable laws and regulations. Actual results might differ materially from those either expressed or implied.

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AUDITOR'S CERTIFICATE ON CORPORATE GOVERNANCE

To,

The Members of

GARNET CONSTRUCTION LIMITED We have examined the compliance of conditions of Corporate Governance by Garnet construction

Limited (the Company) for the year ended March 31, 2012, as stipulated in Clause 49 of the Listing

Agreement of the said Company with the Stock Exchanges.

The compliance of conditions of Corporate Governance is the responsibility of the management. Our

examinations were limited to review of the procedures and implementations thereof adopted by the

Company for ensuring compliance with the conditions of the Corporate Governance as stipulated in

the said clause. It is neither an audit nor an expression of opinion on the financial statements of the

Company.

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

As required by the Guidance Note issued by the Institute of Chartered Accountants of India we have to

state that no investor grievances were pending for a period of one month against the Company as per

the records maintained by the Shareholders / Investor's Grievance Committee.

We further state that such compliance is neither an assurance as to the future viability of the Company

nor of the efficiency or effectiveness with which the management has conducted the affairs of the

Company.

For Shankarlal Jain & Associates, Chartered Accountants Firm Regn No: 109901W

SATISH JAIN

Place: Mumbai Partner

Date: 15TH

June,2012 M. No. 48874

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AUDITOR'S REPORT To, The Members of GARNET CONSTRUCTION LIMITED MUMBAI.

1. We have audited the attached Balance Sheet, of GARNET CONSTRUCTION LIMITED as at 31st March, 2012 and the related Profit and Loss Account & Cash Flow Statement for the year ended on that date annexed thereto which we have signed of the Company for the year ended on that date, annexed thereto. These financial statements are the responsibility of the Management of GARNET CONSTRUCTION LIMITED. Our responsibility is to express an opinion on these financial statements based on our audit.

2. We conducted our audit in accordance with auditing standards generally accepted in India.

Those Standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatements. An audit includes examining, on a test basis, evidence supporting the amount and disclosure in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by the management, as well as evaluating the overall financial statements presentation. We believe that our audit provides a reasonable basis for our opinion.

3. As required by the Companies (Auditors Report) Order, 2003 issued by the Company Law

Board in terms of Section 227 (4A) of the Companies Act, 1956.We enclose in the Annexure a statement on the matters specified in paragraph 4 & 5 of the said Order.

4. Further to our comments in the Annexure referred to in paragraph 1 above, we state that:

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

knowledge and belief were necessary for the purpose of our audit.

b) In our opinion proper books of account as required by the Companies Act, 1956 have been

kept by the Company, so far as it appears from our examination of books.

c) The Balance Sheet, Profit and Loss Account and Cash Flow Statement referred to in this

report are in agreement with the books of account.

d) In our opinion, the Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt

with by this report have been prepared in compliance with the Accounting Standards referred to in Section 211 (3C) of the Companies Act, 1956 to the extent applicable. Except A.S 15 in respect of liabilities for GRATUITY & LEAVE ENCASHMENT which are treated on cash basis.

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e) On the basis of written representations received from Directors & taken on record by

the Board of Directors, we report that none of the Directors of the Company are disqualified from being appointed as Directors of the Company under clause (g) of Sub- section (1) of Section 274 of the Companies Act, 1956.

f ) In our opinion and to the best of our information and according to the explanations given to us, the Balance Sheet, Profit and Loss Account & Cash Flow read together with the Significant Accounting Policies and the Notes thereon give the information required by the Companies Act, 1956 in the manner so required.

(i) in so far as it relates to Balance Sheet, of the state of affairs of the Company as at

31st

March 2012 and

(ii) in so far as it relates to Profit and Loss Account, of PROFIT of the Company for the

year ended on that date.

(iii) In the case of Cash Flow Statement, of the Cash Flow for the year ended on that

date.

FOR SHANKARLAL JAIN & ASSOCIATES CHARTERED ACCOUNTANTS Firm Reg. No. 109901W

Date : 15th June 2012 Bhavana Gujar Place : Mumbai PARTNER

M. No. - 121961

18

ANNEXURE TO THE AUDITOR'S REPORT FOR THE PERIOD ENDED 31ST MARCH, 2012 (Referred to in paragraph 1 of our report of even date)

1. (a) The Company has maintained the proper records showing full particulars including

quantitative details and situation of Fixed Assets. However the same is to be updated.

(b) All the assets have been physically verified by the management during the year and in our opinion it is reasonable having regard to the size of the Company and the nature of its assets. No material discrepancies were noticed on such verification.

(c) In our opinion, the Company has not disposed off a substantial part of Fixed Assets during the year and therefore paragraph 4(i)(c) of the Companies (Auditor's Report) order, 2003 (hereinafter referred to as order) is not applicable .

2. (a) Physical verification of Inventories was conducted by the management during the year

and in our opinion, the frequency of verification is reasonable.

(b) The procedures of physical verification of inventories followed by the Management are reasonable and adequate in relation to the size of the Company and the nature of it's business.

(c) The Company is maintaining proper records of inventory and no material discrepancies have been noticed on physical verification of inventories as compared to book records..

3. (a) During the year the Company has not granted loans secured or unsecured to the

Companies, Firms or other parties listed in the register maintained under section 301 of the companies Act, 1956 therefore provision of sub clauses (b) (c) & (d) of clause iii of the Companies (Auditors Report) order 2003 are not applicable to the company.

(d) The company has taken loans from five parties of Rs.422.26 Lakhs from the Companies, Firms or other parties listed in the register maintained under section 301 of the companies Act, 1956. The balance outstanding as on 31st March 2012 is Rs. 2.58 lacs.

(e) In our opinion the rate of interest and other terms and conditions of loans are not prima- facie prejudicial to the interest of the company.

(f) The principal amount and interest has been repaid in time.

4. In our opinion and according to the information and explanations given to us, the internal

control procedure of the Company relating to the purchase of Land and Fixed Assets and sale of Land, Plots & Sheds are commensurate with the size of the Company and the nature of its business and we have neither come across nor have we been informed of any major weakness in internal control procedures.

19

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

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

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

6. In our opinion and according to the information and explanations given to us, the Company has

not accepted any deposits from the public as specified under the provisions of section 58-A and 58AA of the Companies Act, 1956 and therefore the Directives issued by the Reserve Bank of India and the provisions of section 58-A and 58AA of the Companies Act, 1956 and rules framed there under is not applicable. As explained to us, the Company has not received any order from the Company Law Board.

7. As per the information and explanations given to us, during the year under audit, the Company

did not have an Internal Audit System but had an efficient system for accounting and internal controls.

8. As per the information and explanations given to us, the Central Government has not prescribed

the maintenance of costs records under Section 209(1) (d) of the Companies Act, 1956 for the Companies procedures.

9. (a) In our opinion and according to the information and explanations given to us, the Company is

generally regular in depositing undisputed statutory dues including provident fund, investor education and protection fund, employees' State insurance, Income-Tax, Sales Tax, Wealth-Tax, Customs Duty, Excise Duty, service tax, cess and other statutory dues, if any, with the appropriate authorities except for liability of VAT and service tax which are outstanding and will be paid on collection from the customers.

(b) According to the information and explanations given to us no disputed amount payable in respect of dues relating to Provident Fund, sales tax, Customs duty, wealth tax and cess and other Statutory dues were in arrears as at 31st March, 2012 for a period of more than six months from the date they become payable.

10. The Company does not have accumulated losses as at 31st March, 2012 neither has it has

incurred cash losses during the financial year ended on that date. There was cash loss of Rs.1,30,97,917/- in immediately preceding financial year.

11. In our opinion and according to the information and explanations given to us, the Company has

not defaulted in repayment of dues to financial institutions or banks during the year.

20

12. The Company has not granted loans and advances on the basis of security by way of pledge of

shares, debentures and other securities during the period under review.

13. As per the information and explanation given to us, the provisions of Special Statutes applicable to

Chit fund, Nidhi or Mutual benefit society are not applicable to the Company.

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

15. As explained to us, the Company has not given any guarantee for loans taken by others from bank or financial institutions, the terms and conditions whereof, are prejudicial to the interest of the Company.

16. In our opinions, the term loans have been applied for the purpose for which they were raised.

17. According to the information and explanations given to us and on an overall examination of the

Balance Sheet of the Company, we report that ̀ 3.51 crores of short term funds have been used for long term investments.

18. The company has not made any preferential allotment of shares.

19. According to the information and explanations given to us, the Company has not issued any

debentures during the year under review.

20. The company has not raised any funds with a public issue during the year.

21. Based on the Audit Procedures performed and as per the information and explanations given to us

by the management, we, report that no fraud on or by the Company has been reported or noticed during the year.

FOR SHANKARLAL JAIN & ASSOCIATES CHARTERED ACCOUNTANTS Firm Reg. No. 109901W

Date : 15th June 2012 Bhavana Gujar Place : Mumbai PARTNER

M. No. - 121961

21

GARNET CONSTRUCTION LIMITED Balance Sheet as at 31 March, 2012

Particulars Note

No.

As at 31 March 2012

As at 31 March 2011

A

1

2

3

B

1

2

EQUITY AND LIABILITIES

Shareholders’ funds

(a) Share capital

(b) Reserves and surplus

Non-current liabilities

(a) Long-term borrowings

(b) Other long-term liabilities

Current liabilities

(a) Short-term borrowings

(b) Trade payables

(c) Other current liabilities

(d) Short-term provisions

TOTAL

ASSETS

Non-current assets

(a) Fixed assets

(i) Tangible assets

(ii) Capital work-in-progress

(b) Non-current investments

(c) Long-term loans and advances

Current assets

(b) Inventories

(c) Trade receivables

(d) Cash and cash equivalents

(e) Short-term loans and advances

(f) Other current assets

TOTAL

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

139,022,000

469,668,890

139,022,000

456,553,370

608,690,890 595,575,370

120,949,098

6,722,999

130,263,103

6,722,999

127,672,097 136,986,102

299,802,558

32,050,184

649,678,826

197,361,050

46,444,972

27,552,315

475,210,012

414,127,797 1,178,892,619 963,335,096

1,915,255,606 1,695,896,568

68,690,910

1,484,317

33,822,411

- 70,175,227 33,822,411

90,021,884

9,681,990

30,337,074

2,354,396 99,703,874 32,691,470

847,302,317

445,223,367

59,119,856

393,582,025

148,940

571,559,489

554,943,725

99,601,761

402,335,171

942,542 1,745,376,505 1,629,382,688

1,915,255,606 1,695,896,569

See accompanying notes forming part of the

financial statements

As per our report of even date

For Shankarlal Jain & Associates For Garnet Construction Limited

Chartered Accountants

Firm Regn No.: 109901W

Bhavana Gujar Kishan Kumar Kedia Arun Kedia

Partner Chairman and Director

Membership No.: 121961 Managing Director

Date : 15th

June 2012

Place: Mumbai

22

GARNET CONSTRUCTION LIMITED

Statement of Profit and Loss for the year ended 31 March, 2012

Particulars Note

No. For the year ended

31 March, 2012 For the year ended

31 March, 2011

A

1

2

3

4

5

6

7

8

CONTINUING OPERATIONS

Revenue from operations (gross)

Other income

Total revenue (1+2)

Expenses

(a) Cost of sales made during the year

(b) Land & Construction Cost

(c ) Purchases for Resale

(d) Changes in inventories of finished goods, work-in-progress and stock-in-trade

(e) Employee benefits expense

(f) Finance costs

(g) Depreciation and amortisation expense

(h) Other expenses

Total expenses

Profit / (Loss) before exceptional and extraordinary items and tax

Tax expense:

(a) Current tax expense for current year

(b) Current tax expense relating to prior years

Profit / (Loss) for the year (11 + 13)

Earning Per Share

Basic

Diluted

18

19

20

21

22

23

24

25

26

57,417,789

25,210,276

16,804,759

20,061,244

82,628,065 36,866,003

6,103,354

48,715,425

7,718,278

(55,834,517)

15,245,777

19,799,822

3,292,643

22,806,762

7,122,469

58,230,469

-

(58,175,668)

11,017,309

14,706,275

2,539,257

17,895,279

67,847,545 53,335,390

14,780,520

(16,469,387)

1,665,000

-

-

6,208,119

13,115,520 (22,677,506)

0.94

0.94

(1.63)

(1.63)

As per our report of even date

For Shankarlal Jain & Associates For Garnet Construction Limited

Chartered Accountants

Firm Regn No.: 109901W

Bhavana Gujar Kishan Kumar Kedia Arun Kedia Partner Chairman and Director Membership No.: 121961

Date : 15th

June 2012 Managing Director

Place: Mumbai

23


CASH FLOW STATEMENT FOR THE YEAR ENDED 31ST MARCH, 2012

A.

B.

C.

Paticulars 2011 -12

AMOUNT RS. AMOUNT RS. 2010-11

AMOUNT RS. AMOUNT RS.

CASH FLOW FROM OPERATING ACTIVITIES

Net Profit before tax and extraordinary items

ADJUSTED FOR :

Depreciation

Miscellaneous Expenses W/off

Interest Received

Rent received

Expenses of project completed W/Back

Interest Paid

Loss on Sale of Fixed Assets

Expenses directly debited to Provision

Operating Profit before Working Capital changes

ADJUSTED FOR :

Trade and other Receivables

Inventories

Trade Payables

Other Liabilities & Provisions

Loans & advance

Cash Generated from Operations

Less : Taxes Paid Net off Refund Recived

(C.Y.) Less : Taxes Paid (P.Y.)

Interest Paid

Interest Received

Expenses of project completed W/Back

Net Cash From Operating Activities

CASH FLOW FROM INVESTING ACTIVITIES

Purchases of Fixed Assets

Sale of Fixed Assets

Purchase of Investments

Rent received

Net Cash used in Investing Activities

CASH FLOW FROM FINANCING ACTIVITIES

Proceeds from Borrowings

Net Cash used in Financing Activities

NET INCREASE IN CASH & CASH EQUIVALENTS (A+B+C)

OPENING BALANCE OF CASH & CASH EQUIVALENTS

CLOSING BALANCE OF CASH & CASH EQUIVALENTS

3,292,643

793,602

(758,285)

(24,451,991)

-

19,799,822

427,955

(216,766,747)

109,720,358

(275,742,829)

4,497,869

174,468,815

2,532,531

(2,771,980)

(19,799,822)

758,285

(40,993,414)

920,000

(59,684,810)

24,451,991

244,043,581

14,780,520

(217,663,001)

2,539,257

832,202

(351,141)

(18,091,295)

(1,521,481)

13,836,275

-

(170,992,446)

143,981,716

(206,925,350)

220,345,470

(208,889,395)

(16,469,377)

(173,748,629) (202,882,480)

15,476,744

(190,218,006)

(51,487,558) (187,405,737)

(21,813,517)

(241,705,564) (11,172,381)

(5,309,379)

(13,836,275)

351,141

(209,219,254)

(75,306,233)

244,043,581

(40,481,906)

99,601,761

59,119,856

(271,672,458)

(8,210,940)

-

(301,846)

18,091,295

9,578,509

120,652,843 120,652,843

(141,441,106)

241,042,866

99,601,760

As per Our Report of Even Date

FOR SHANKARLAL JAIN & ASSOCIATION

CHARTERED ACCOUNTANTS

Bhavana Gujar

Partner

Membership No.: 121961

Date : 15th

June 2012

Place: Mumbai

24

AUDITORS' CERTIFICATE

We have examined the attached Cash Flow Statement of Garnet Construction Limited, for the Year ended

31st March, 2012. The Statement has been prepared by the Company in accordance with the requirements

of listing agreement Clause 32 with the Mumbai Stock Exchange and is based on and in accordance with the

corresponding Profit and Loss Account and Balance Sheet of the Company covered by our Report of

15th June 2012 to the Members of the Company.

As per Our Report of Even Date

FOR SHANKARLAL JAIN & ASSOCIATION

CHARTERED ACCOUNTANTS

Bhavana Gujar

Partner

Membership No.: 121961

Date : 15th

June 2012

Place: Mumbai

25


Notes Forming Part of Financials

1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES :

The significant Accounting Policies followed by the Company are as stated below:-

1.1 BASIS OF PREPARATION OF FINANCIAL STATEMENTS :

(a) The Financial Statements are prepared under the historical cost convention in accordance with the

generally accepted accounting principals and the provisions of the Companies Act,1956, subject to what is stated herein below, as adopted consistently by the Company.

(b) The Company being a Development and Construction Company engaged in the construction of the

Industrial Plots, Sheds & the Residential Bunglows. During the year under review, the Company has followed the method of accounting for the recognizing of sales on the basis completion of sales method prescribed in AS-9 Revenue Recognition. Hence sales are recognized when possession is handed over to the parties. All expenses and incomes not directly related to particular projects are charged to Profit and loss account of the financial year during which the same are incurred.

(c) All revenue, costs, assets & liabilities are accounted for on accrual basis.

1.2 FIXED ASSETS :

Fixed Assets have been stated at Cost less Depreciation.

1.3 DEPRECIATION :

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

1.4 INVESTMENTS :

I) All the long-term investments are stated at cost of acquisition and provision for diminution is made

if the fall in value of investment is other than temporary nature.

ii) All the current investments are stated at cost of fair market value whichever is lower

1.5 FOREIGN CURRENCY TRANSACTION :

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

1.6 PUBLIC ISSUE EXPENSES :

Such expenses are amortized 1/5th in each year.

26

1.7 TAXES ON INCOME :

(a) Provision for Income Tax is made on the basis of income for the current accounting period

in accordance with the Income tax Act, 1961. (b) Deferred tax resulting from timing differences between book and tax profit is accounted

for under the liability method, at the current rate of tax, to the extent that the timing differences are expected to crystallize.

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

1.8 REVENUE RECOGNITION :

(I) The company is engaged in construction activity and the sales are recognized when the

construction is completed and possession is given. Sales are recognized net off returns and discounts given.

(ii) During the financial year 2008-09 the company had entered into various agreements for sale of its plots, Real Estate etc. In accordance with the practice followed by the company in the past, sales revenue and profit thereon were recognized at the time of entering such agreement based on advance received against sales.

(iii) During the previous financial year due to unfavorable conditions, some of the parties to whom sales had been affected have failed to meet their commitment. Therefore during the previous financial year certain sales agreement effected in 2008-09 & earlier year's stands cancelled and sales return and reversal of profit thereon has been effected during the previous financial year. The company upto 31st March 2008 considered sales as completed and credited its profit and loss account by the agreed sales consideration of unit sold. Such units sold were not ready for possession; necessary provisions for expenses to be incurred were made on such sales. In F.Y.2008-09 company has changed the method of accounting so as to recognize sale on giving possession of unit sold. In case of sales return affected out of such sales, work in progress is reflected at cost which includes provision for expenses provided in earlier years.

1.9 BORROWING COSTS

Borrowing costs that are attributable to the acquisition, construction or production of a qualifying asset are capitalised as a part of the cost of such asset. Other borrowings costs are charged to statement of profit and loss as incurred.

1.10 IMPAIRMENT OF ASSETS

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

27

28

Particulars As at 31 March

2012 As at 31 March

2011

` ` (a) Authorised Share Capital

5,80,00,000 (5,80,00,000) Equity shares of `10 each with voting rights (b) Issued Share Capital

1,39,02,200 (1,39,02,200) Equity shares of `10 each with voting rights (c) Subscribed and fully paid up

1,39,02,200 (1,39,02,200) Equity shares of `10 each with voting rights

580,000,000

139,022,000

139,022,000

580,000,000

139,022,000

139,022,000

Total 139,022,000 139,022,000

Class of shares / Name of shareholder

As at 31 March 2012

As at 31 March 2011

Number of shares

held

% holding in

that class of

shares

Number of

shares held

% holding in

that class of

shares Equity shares with voting rights

Kusumdevi Kedia

Sanjay Kumar Kedia

Arun Kumar Kedia

Kishan Kumar Kedia

1,383,380

1,326,426

1,279,117

1,099,100

9.95%

9.54%

9.20%

7.91%

1,243,380

1,186,426

1,139,117

959,100

8.94%

8.53%

8.19%

6.90%

29

Note 3 Reserves and surplus


2012 As at 31 March

2011 ` `

(A) Securities premium account

Opening balance

Add / Less : Changes during the year

Closing balance

(B) Profit & Loss Account

Opening balance

Add: Transferred from surplus

Closing balance

433,000,000

-

433,000,000

- 433,000,000 433,000,000

23,553,370

13,115,520

46,230,876

(22,677,506) 36,668,890 23,553,370

Total 469,668,890 456,553,370

Note 4 Long-term borrowings


2012 As at 31 March

2011 ` `

Secured

Term loans

Sicom I

( Secured by First charge on industrial land given on lease and First

charge on NA Land located at Isambe along with hypothecation and

escrow of lease rent receivable)

120,949,098

130,263,103

Total 120,949,098 130,263,103

Particulars

2011-12 2010-11 Non - Current

Portion Current

Maturities

Total Non - Current

Portion Current

Maturities

Total

Term Loan

Vehicle Loan

120,949,098

-

9,314,005

-

130,263,103

-

130,263,103

-

29,787,519

253,314

160,050,622

253,314 Total 120,949,098 9,314,005 130,263,103 130,263,103 30,040,833 160,303,936

30


2012

As at 31 March

2011

` `

Security Deposits 6,722,999 6,722,999

Total 6,722,999 6,722,999


2012

As at 31 March

2011

` `

Secured

From banks

Allahabad bank Overdraft

(Secured against plot at Village Dindoshi, Goregain (EAST) and personal

Guarantee of two directors)

From other parties

SICOM II

(Secured against First Charge by way of Mortgage of Industrial Land

situated at Honad, Taluka Raigad and residential land situated in Isambe,

Taluka Raigad and first charge by way of hypothecation and escrow of

identified cash flows in the form of receivables from Project Magic Hills.

It is also secured by irrevocable joint and several personal guarantees of 3

directors)

Unsecured

Loans and advances from related parties

49,545,242

250,000,000

257,316

45,419,202

1,025,770

Total 299,802,558 46,444,972


2012 As at 31 March

2011 ` `

Trade payables

32,050,184

27,552,315

Total 32,050,184 27,552,315


2012 As at 31 March

2011 ` `

(a)Current maturities of long-term debt

Secured

Term Loan

From other parties

SICOM I (refer Note 4)

Reliance Capital I

(Secured against Mortgage of immovable properties of the company and

personally guaranteed by the Directors.)

Reliance Capital II

(secured against mortgage of Property owned by director and personal

guarantee by the director.)

Vehicle Loan

From banks

ICICI Bank

(Secured by the first charge of the Motor Car)

(b) Advance from Customer

(c) Statutory Dues

9,314,005

-

-

-

639,772,406

592,415

6,712,386

12,388,905

10,686,228

253,314

442,953,140

2,216,039

Total 649,678,826 475,210,012

Note 7 Trade payables

Note 8 Other current liabilities

31

32


2012

As at 31 March

2011

` `

Provision for Expenses

Development Expenses at Panchdeep Housing Complex

Development Expenses for Plot Construction at Dhamni

Provision for expenses for Bunglow -Magic Hills

3,371,543

654,336

193,335,171

7,465,021

654,336

406,008,440

Total 197,361,050 414,127,797

GROSS BLOCK DEPRECIATION NET BLOCK

PARTICULARS OPENING

BALANCE

01/04/2011

ADDITION

DURING

THE YEAR

DEDUCTION

DURING

THE YEAR

GROSS BLOCK

AS ON

31/03/2012

ACCUMULATED

DEPRICIATON AS

ON 01/04/2011

DEDUCTION FOR

THE YEAR ENDED

31/03/2012

DEPRECIATION

FOR THE YEAR

ENDED 31/03/2012

TOTAL

DEPRECIATIO

N

AS ON

31/03/2012

AS ON

31/03/2011

OFFICE PREMISES 14,207,200 37,244,315 - 51,451,515 2,904,581 - 574,205 3,478,786 47,972,729 11,302,619

COMPUTER & PRINTER 979,008 218,890 - 1,197,898 484,247 - 172,877 657,124 540,774 494,761

OFFICE EQUIPMENTS 1,257,749 589,498 - 1,847,247 414,267 - 81,393 495,660 1,351,587 843,482

FURNITURE & FIXTURES 4,393,646 4,393,646 958,479 - 278,118 1,236,597 3,157,049 3,435,167

MOTOR CAR 22,861,437 1,456,394 1,997,122 22,320,709 5,115,056 649,167 2,186,051 6,651,939 15,668,770 17,746,381

TOTAL 43,699,040 39,509,097 1,997,122 81,211,015 9,876,629 649,167 3,292,643 12,520,105 68,690,910 33,822,411

PREVIOUS YEAR 35,488,100 8,210,940 - 43,699,040 7,337,372 - 2,539,257 9,876,629 33,822,411 28,150,728

33

Particulars

As at 31 March

2012

As at 31 March

2011

` `

Investments (At cost)

Shares

Unquoted

Other Entities

Varaha Infra Ltd. 30000 shares of Rs. 10 each Shri Siddhi Vinayak Enterprises Pvt Ltd

45026 shares of Rs. 100 each

Other non-current investments

In Gold Coins (152.32 Gms)

30,000,000

59,660,000

361,884

30,000,000

337,074

Total 90,021,884 30,337,074


2012

As at 31 March

2011

` `

Long Term Loans & Advances (Unsecured, Considered Good) (a) Security deposits

9,681,990 2,354,396

Total 9,681,990 2,354,396

34

Particulars As at 31 March,

2012 As at 31 March,

2011

` `

Stock-in-trade (acquired for trading)

Flat

Stock-in-trade

Panchdeep Housing Complex

Neelkanth Industrial Estate

Emrald Industrial Estate

NA Land

Work-in-progress

Magic Hills

Crystal Springs

Goregaon

7,718,278

22,828,141

332,334

145,509

523,524,798

84,064,235

74,785,433

133,903,589

-

2,653,802

862,677

145,509

323,260,482

61,300,364

64,891,530

118,445,125

Total 847,302,317 571,559,489


2012 As at 31 March

2011 ` `

Trade receivables (unsecured, Considered Good)

Outstanding for a period exceeding six months

Others

445,223,366

554,943,725

Total 445,223,367 554,943,725

35

Particulars

As at 31 March

2012

As at 31 March

2011

` `

(a) Balances with banks

(b) Cash on hand

58,973,745

146,110

99,339,136

262,625

Total 59,119,856 99,601,761


2012

As at 31 March

2011

` `

Short-term loans and advances (Unsecured, Considered Good)

Advance agianst Share Application

Loan to employees

Advances given

Loan given

Balances with government authorities

Advance income tax net off Provision for tax

Prepaid expenses

-

844,850

348,712,938

18,500,000

12,341,675

13,182,562

12,500,000

876,700

377,595,596

-

11,234,696

128,179

Total 393,582,025 402,335,171


2012

As at 31 March

2011

` `

Unamortised expenses

Share issue expenses to the extent not written off

148,940

942,542

Total 148,940 942,542


Schedule Forming Part of Profit & Loss Account

Note 18 Revenue from operations

Particulars

For the year ended 31

March 2012 For the year ended 31

March 2011 ` `

(a) Sale of Land / Plots

57,417,789

16,804,759

Total 57,417,789 16,804,759

Note 19 Other income

Particulars For the year ended 31


March 2011

` ` (a) Interest Received

(b) Lease Rental Received

(c ) Rebate & Discount

(d) Expenses of Project completed W/Back

758,285

24,451,991

-

-

351,141

18,091,295

97,327

1,521,481

Total 25,210,276 20,061,244

Note 20 Cost of sales made during the year



March 2011 ` `

(a) Stock of Land [ Without NA ]

(b) Cost of Plots Sold [ Panchdeep Housing Complex ]

(c ) Cost of Plots Sold [ Emrald Industrial Estate ]

(d) Cost of Plots Sold [ Neelkanth Industrial Estate ]

5,086,322

486,689

-

530,343

5,973,836

613,920

162,950

371,763

Total 6,103,354 7,122,469

Note 21 Land & Construction Cost



March 2011 ` `

(a) Crystal Spring Bunglow Scheme

(b) Building Property [ Dindoshi- Goregoan ]

(c ) Magic hill - Bunglow Scheme

9,893,903

15,458,464

23,363,057

35,606,068

425,714

22,198,687

Total 48,715,425 58,230,469

36

Note 22 Changes in inventories of finished goods, work-in-progress and stock-in-trade



March 2011 ` `

(a) Inventories at the end of the year:

Stock-in-trade (Trading)

Work-in-progress

(b) Inventories at the beginning of the year:

Stock-in-trade (Trading)

Work-in-progress

7,718,278

292,753,258

-

244,637,019

-

244,637,019

-

186,461,351

Net (increase) / decrease (55,834,517) (58,175,668)

Note 23 Employee benefits expense



March, 2011 ` `

Salaries and wages 15,245,777 11,017,309

Total 15,245,777 11,017,309

Note 23 A -Remuneration Paid to Directors



March, 2011

Salaries 5,580,000 3,300,000

Note 24 Finance costs


March, 2012 For the year ended 31

March, 2011 ` `

(a) Interest expense on: (i) Borrowings

(ii) Others

- Interest on delayed / deferred payment of income tax

- Others

(b) Other borrowing costs

19,211,693

1,039

121,375

-

465,715

13,760,150

5,765

-

70,360

870,000 Total 19,799,822 14,706,275

Note 25 Depreciation and amortisation expense



March, 2011 ` `

Depreciation 3,292,643 2,539,257 Total 3,292,643 2,539,257

37

Note 26 Other expenses



March, 2011

` `

Power and fuel

Rent including lease rentals

Repairs and maintenance - Others

Insurance

Telephone & Communication Travelling and conveyance Electricity Expenses Office Expenses Legal & Professional Fees Advertisement & Sales Promotion Expenses Payment to Auditors Commission & Brokerage Loss on Sale of Motor Car Motor Car Expenses Donations and contributions Amortisation of share issue expenses

Miscellaneous Expenses

885,372

7,765,944

846,043 293,827 693,837

1,200,686 668,388 136,358

2,410,380 2,725,750 729,425 770,000 427,955 592,351 152,665 793,602

1,714,179

1,256,907

4,479,500

406,554 112,715 842,217

1,129,635 388,050 383,355

2,937,872 2,929,332 188,493

- -

694,922 73,852 832,202

1,239,672 Total 22,806,762 17,895,279

Note 26A - Payment to Auditors



March, 2011

` ` Payments to the auditors comprises

As auditors - statutory audit Tax Audit

For taxation matters & Other services

100,000 50,000

579,425

70,000 30,000

88,493 Total 729,425 188,493

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

38

28 Related party Disclosures

List of Related Parties only with whom transactions are executed.

a) Key Management Personnel

Kishan Kumar Kedia Chairman & MD Arun Kumar Kedia Director Sanjay Kumar Kedia Director Santosh Kumar Ginoria Director

b) Associate Concern/ Relative of Managerial Person S. K Investments

Associate Concern

J. S. Realty Pvt. Ltd. Neelkanth Industrial Estate Panchsheel Industrial Estate Aditya Industrial Estate Panchdeep Industrial Estate Kedia Industrial Development Corporation Kusumdevi Kedia Relative of Director

Previous year figures shown in bracket (Amt in Rs. Lakhs)

Particulars of transactions

Relative Opening balance

Transactions during the year

Closing balance

Remuneration

Key Management Personnel

0.15 cr (NIL)

55.80 Dr. (33.00 Dr)

NIL (NIL)

NIL (0.15 Cr)

Interest NIL NIL

0.96 Dr. (1.42 Dr)

NIL (NIL)

NIL (NIL)

Loans Received

10.26Cr (7.03 Cr)

28.75 Cr. (10.42 Cr)

36.44 Dr. ( 7.19 Dr)

2.57 Cr. ( 10.26 Cr)

Associate Concerns NIL NIL

385.83 Cr. NIL

385.83Dr.. NIL

NIL NIL

Advances Given

Key Management Personnel

NIL NIL

212.36 Cr. (211.13 Cr)

212.36 Dr (211.13 Dr)

NIL NIL

Associate Concerns NIL NIL

190.78 Cr. (84.00 Cr)

190.78 Dr. (84.00 Dr)

NIL NIL

Relative of Director NIL NIL

37.50 Cr. (19.50 Cr)

37.50 Dr. (19.50 Dr)

NIL NIL

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

29 Service tax payable on account of Notification No. 36/2010-ST dated 28-6-2010 valid w.e.f

01/07/2010 is neither provided nor paid by the assessee since as per the relevant clause in the agreements with customers, the same would be recovered from the customers & paid to the authorities as and when the amount is recovered from the customer and final possession is handed over.

30 VAT payable on account of sale of Property applicable since 01/04/2010 on all sale agreements entered as on or after 01/04/2010 is neither provided for nor paid by the assessee as per the relevant clause in the agreements with customers, the same would be recovered from the customers & paid to the authorities as and when the amount is recovered from the customer and final possession is handed over

39

31 Segment information under Accounting Standard-17 Segment Reporting is not applicable to the Company having only one segment of Properties Development.

32 Debtors Creditors and loans & advances are subject to confirmation and reconciliation. All the debtors are unsecured and considered good except those as notified in Note 14A.

Pursuing to Accounting Standard-22 issued by the Institute of Chartered Accountants of India, current tax is determined at the amount of tax payable in respect of estimated taxable income for the year.

Deferred tax resulting from `Timing Difference' between book profit and taxable profit for the year is accounted for, using the tax rates and laws that have been enacted as on the balance sheet date. During the year company has not recognized the deferred tax Assets following prudence concept.

Deferred Tax liabilities pursuant to AS 22 is calculated here as under

33 Equity Per Share

34 Expenditure in Foreign Currency Rs. 2,36,977/- (P.Y. 1,83,572/- ) towards on Foreign Travel Expenses.

35 Contingent Liability Capital Commitment yet to be executed amounting to Rs. 3,31,67,295/- (P.Y. Rs. 1,95,68,545/- )

36 Figures have been regrouped or rearranged wherever necessary for the comparison purposes.

For SHANKARLAL JAIN& ASSOCIATES For GARNET CONSTRUCTION LIMITED CHARTERED ACCOUNTANTS.

Bhavana Gujar MR. K. K. KEDIA MR.ARUN KEDIA PARTNER CHAIRMAN & DIRECTOR M.NO. 121961 MANAGING DIRECTOR MARKETING

PLACE : MUMBAI.

DATE :

Deffered Tax Liabilities Current year Previous Year

On Depreciation 17,18,249 1518651

Less: Deffered Tax Assets: On Unabsorbed Business Losses (Restricted to the extent of deferred Tax Liabilities)

17,18,249

1518651

NET DEFERRED TAX LIABILITIES NIL NIL

Current year Previous Year Net Profit after Tax (Rs. In Lacs) 13,115,520 (22677505) Weighted Avg No. of Shares Used in Computing earning Per Share

1,39,02,200

1,39,02,200

Earning per share (Basic) 0.94 (1.63) Earnings Per Share (Diluted) 0.94 (1.63) Face Value Per Share(In Rs.) 10 10.00

40

GARNET CONSTRUCTION LIMITED Regd. Office : 17, Milap Apartments, S.V Road, Malad (West), Mumbai - 400 064

ATTENDANCE SLIP Regd. Folio No.

DP ID

Client ID

No. of Shares held

I hereby record my presence at the 20

th Annual General Meeting of the Company held at Ashish – 1 Banquet, Land Mark

Building, Link Road, Mid Chowky, Malad (West), Mumbai – 400 064 on Friday, the 28th

September, 2012 at 10.00 a.m.

1. Full Name of the member (In Block Letter)

2. Full name of the joint – Holders (s) (In Block Letter)

3. Full Name of the Proxy (In Block Letter)

4. Signature of the Member/Proxy attending the Meeting

-----------------------------------------------------Tear Here -----------------------------------------------------

GARNET CONSTRUCTION LIMITED Regd. Office: 17, Milap Apartments, S.V Road , Malad (West), Mumbai - 400 064

Regd. Folio No. PROXY FORM

DP ID

Client ID

No. of Shares held

I /We of being a Member /

Members of Garnet Construction Limited, hereby appoint___________________________________ of

or failing him / her of as my / our Proxy to vote for me / us on my / our

behalf at the 20th

Annual General Meeting of the Company to be held on Friday, the 28th

September, 2012 at Ashish-1

Banquet,

Land Mark Building, Link Road, Mid Chowky, Malad (West), Mumbai - 400 064 at 10.00 a.m. and at any adjourned thereof.

Affix

Signed this Day 2012. One Rs. Revenue Stamp

Note : Member/Proxy attending the Meeting must fill – in this Attendance Slip and hand it over at the entrance of the venue of

the Meeting.

41

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