1 Corporate Information

MARG Limited (the Company) was incorporated on December 16, 1994. The registered office of the Company is located at Marg Axis, 4/318, Rajiv Gandhi Salai, Kotivakkam, Chennai- 600 041. The Company is mainly engaged in the business of construction and real estate.

*Cash Credit are secured by inventories, advances, receivables and other current assets of specified projects, fixed deposit receipts and immovable properties.

Defaults on repayment of short-term loans.

Loan Of Rs 122.67 Crores is overdue for more than 90 days.

Term Loans and other secured loans are Secured by way of charge on rentals, mortgage / Hypothecation of movable and immovable properties.

Defaults on repayment of short-term loans and interest thereof

Short-term loans of Rs 920.24 Crores were overdue for a period of more than 90 days respectively

Note 2

a Estimated amount of liability on capital contracts : Rs 3.3 Crores (PY Rs 3.3 Crores)

b Corporate Guarantees given to Banks in respect of loans taken by other Companies : Rs 3247.67 Crs(PY Rs 3247.67 Crs)

c. Corporate Guarantees given to Banks in respect of performance bank guarantees issued by them : Rs 65.89 Crores ( Previous Year Rs ^c 71.69 Crores)

d. The company has imported capital goods at concessional rate of customs duty under the Export Promotion Credit Guarantee (EPCG) d scheme against submission of bank guarantees. In terms of the scheme, the company is obliged to export goods/ services of certain FOB value as specified in the said scheme. As at the year end, the company has the following unfulfilled export obligations under the scheme

_e Claims not acknowledged as debts by the Company: Rs 106.21 Crores (Previous year Rs106.11 Crores). The Company is a party to several legal suits on construction contract terms related disputes, pending before various courts in India as well as arbitration proceedings. It is not possible to make a fair assessment of the likely financial impact of these pending disputes / litigations until the cases are decided by the appropriate authorities.

Note 3

a) The Company did not provided for interest for the year ended 31st March, 2018 on certain loans that are assigned to ARC, the management states that it negotiating with the ARC for revised terms and conditions and seeking for concession in terms of waiver/reduced rate of interest. Hence, the management is of the opinion considering such concessions it is appropriate not to charge an interest for the year ended 31st March 2018.

b) The company and Edelweiss ARC (EARC) agreed to restructure our debt repayment proposal. As a condition to the proposal, we have to allot Equity Shares on a Preferential allotment/Private placement basis for part debt convert to equity and balance to be realised by liquidating collateral assets offered over the period of time. On fulfilment of precedent conditions as per the above sanctions, definite agreement has to be executed. We have not provided interest on loans assigned to EARC during the Year.

Note 4 BORROWINGS FROM BANKS AND OTHERS:

a) The Cash credit, WCTL, FITL and other facilities provided by the consortium comprising of Indian Bank, Allahabad Bank, Oriental Bank of Commerce and Indian Overseas Bank are transferred to Edelweiss Asset Reconstruction Company Limited (ARC) on various dates. The outstanding balance in respect of these loans as per EARC Sanction amounts to Rs 904.63 Crs as on 31st March, 2018 in respect of these loans are included in 'Current Maturities of long term of borrowings' in Note 23. The company didn't provide for Interest on these loans during the year as explained in Note 28.

b) The South Indian Bank had taken possession of property of the Company situated at Thiruvanmiyur, having carrying cost of Rs 0.45 Crores and issued a tender-cum-auction sale notice in respect the short term loan as per EARC is Rs 14.51 Crores. The loan was assigned to Edelweiss ARC. The Company did not provide interest during the year as explained in Note 28.

c) State Bank of Mauritius Limited had assigned to the loan to Pegasus Assets Reconstruction Private Limited ('the ARC'). Since the revised terms of restructure with the ARC is yet to be finalised, the outstanding amount of Rs 20.81 Crores is included in Current Maturities of long term of borrowings in Note 23. The Company did not provide interest during the year as explained in Note 28. Subsequently, the ARC has issued notice under SARFAESI Act.

d) The Term loan sanctioned by Punjab National Bank was assigned to Edelweiss Asset Reconstruction Private Limited (ARC). The outstanding amount as per EARC is Rs 44.61 Crores are included in Current Maturities of long term of borrowings in Note 23. The company didn't provide for Interest on this loan during the year as explained in Note 28.

e) SICOM Limited has given One time sanction for Rs 39.48 Crores of which of Rs 10 Crores settled. Sicom had persued legal steps for recovery of balance amount. Due to real estate market situation , we are finding difficult to liquidate. However, we are confident to settle them at the earliest.

f) IFCI Venture Capital Funds Ltd has recalled the term loan and issued possession notice under SARFASEI Act to the company in respect of outstanding dues of Rs 27.79 Crores as on 31st March, 18. Currently, the case is pending with Debts Recovery Tribunal, Chennai. IFCI has offered to sell the loan at Rs 12.50 Crores for which we are in process of identifying suitable investors.

g) ICICI Bank has filed case with Debts Recovery Tribunal, Chennai in respect of outstanding dues of Rs 65.96 Crores as on 31st March, 2018, which is pendin

h) L&T finance has moved to NCLT for the recovery of Rs 55 Lacs as full and final settlement of which will be partially realising by sale of Flats for approximately Rs 35 Lacs and balance to be paid in installments.

i) SREI outstanding across our group companies is under negotiation with them for settlement as a package which is expected to be concluded during financial year 2018-19.

Note 5 PREPARATION OF FINANCIAL STATEMENTS ON 'GOING CONCERN' BASIS:

The Company has recorded a Net loss of Rs 12.85 Crores for the year ended 31st March 2018, Rs26.89 Crores for the year ended 31st March, 2017, Rs 16.98 Crores for the year ended 31st March, 2016, Rs 172.45 Crores for the year ended 31st March, 2015, Rs 263.82 Crores for the year ended 31st March, 2014 and Rs 36.04 Crores for the year ended 31st March, 2013. The Company has defaulted in the payments due to Banks, Financial Institutions and others towards principal and interest, statutory dues and payment to vendors. Further there were lower cash inflows from existing projects and some creditors have filed winding up petitions against the company. Management is confident that the Company will be able to generate profit and cash in future years and meet its financial obligation as they arise. The financial statements have been prepared on a going concern basis based on cumulative input of the following business potential and mitigating factors:

a) The EPC division of the Company- has local and international bids are being planned leveraging the experience gained through execution of Marine, Infrastructure and Industrial EPC.

b) Many of the EPC loans and corporate loans have been restructured and/or assigned to ARCs. The company intends to approach the ARCs for concessions in Inte

c) The Company is also in the process of generating cash through equity disinvestment in operating SPVs and realisation of advances given to subsidiaries which intends to commence new residential and plotted development projects.

d) The Company is also in the process of generating cash through equity disinvestment in operating SPVs and realisation of advances given to subsidiaries which have commenced new residential and plotted development projects.

Note INVESTMENT AND ADVANCE / RECEIVABLES DUE FROM SUBSIDIARY COMPANIES:

6 The company has invested in equity amounting to Rs 169.18 Crores (PY Rs 169.18 Crores) in New Chennai Township Private Limited, a wholly owned subsidiary as on 31st March, 2018. The Company has advanced an amount of Rs 352.58 Crores (PY Rs 335.72 Crores) as subordinated loan to the subsidiary and Rs 67.40 Crores (Rs 66.29 Crores) is carried forward as receivables as on 31st March, 2018. The said subsidiary has incurred losses which have resulted in negative net-worth as on 31st March, 2018. The subsidiary company has obtained valuation report for the assets of the company, from an approved valuer, which supports the carrying value of such investment and loan outstanding as on 31st March, 2018. The subsidiary company is exploring possibilities to revive the projects and generate cash flows. Accordingly, the financial statements of the subsidiary company have been prepared on 'Going concern' basis and the management is of the opinion that no provision is considered necessary at this stage in respect of investments, loans and receivables outstanding from the said subsidiary company as at 31st March, 2018.

7 The company has invested in equity amounting to Rs 136.72 Crores (PY Rs 136.72 Crores) in Riverside infrastructure (India) Private Limited, subsidiary of the company as on 31st March, 2018. The Company has advanced an amount of Rs 44.75 Crores (PY Rs 42.65 Crores) as subordinated loan to the subsidiary and Rs 59.74 Crores (PY Rs 59.74 Crores) is carried forward as receivables as on 31st March, 2018. The Mall project of the subsidiary continues to be suspended and the company defaulted in payments of dues to Banks/Financial Institutions towards principal and interest. The subsidiary company continues to discuss with strategic partners and is confident of generating cash flows. Accordingly, the financial statements of the subsidiary company have been prepared on 'Going concern' basis and the management is of the opinion that no provision is considered necessary at this stage in respect of investments, loans and receivables outstanding from the said subsidiary company as at 31st March, 2018.

8 The company has invested in equity amounting to Rs 54.05 Crores (PY Rs 54.05 Crores) in Marg Properties Limited, wholly owned subsidiary of the company as on 31st March, 2018.The Company has advanced an amount of Rs 42.87 Crores (PY Rs 42.74 Crores) as loan to the subsidiary and Rs 17.06 Crores (PY Rs 23.39 Crores) is carried forward as receivables as on 31st March, 2018. The subsidiary Company has negative net-worth as on 31st March, 2018. The loans of the company have been assigned to ARCs and the Management is confident that the Company will be able to generate cash from ongoing projects in future years and meet its financial obligation as they arise. Accordingly, the financial statements of the subsidiary company have been prepared on 'Going concern' basis and the management is of the opinion that no provision is considered necessary at this stage in respect of investments, loans and receivables outstanding from the said subsidiary company as at 31st Mar, 2018.

The Company has invested in equity amounting to Rs 0.24 Crores (PY Rs 0.24 Crores) and an amount of Rs 147.08 Crores (PY Rs 147.08 Crores) is advanced as loan to its subsidiaries/fellow subsidiaries and Rs 4.62 Crores (PY Rs 4.62 Crores) is carried forward as receivables as on 31st March 2018, which have provided land owned by them as security for the loans availed from lenders. As the borrowing company defaulted in repayment of such loans, the land owned by these subsidiaries may be attached/sold which may adversely affect the recoverability of the investment/advance. Howeverno such sale has been made by the banks and accordingly, the financial statements of such subsidiaries have been prepared on 'Going concern' basis and management is of the opinion that no provision is considered necessary at this stage in respect of investments, loans and receivables outstanding from these subsidiaries as at 31st March, 2018.

Note 9

a) The company executed a construction contract at Agra for DG MAP, a project of the Government of India which is terminated during financial year 14-15. The company has receivables of Rs0.46 crores and work in progress of Rs13.99 Crores as on 31st March, 2018 relating to this project still continuing. Inventory of materials amounting to Rs2.01 Crores and plant and machinery amounting to Rs1.51 Crores as on 31st March, 2018 are withheld at site by the client. The management is confident that it will be able to recover the entire dues out of the arbitration process initiated by the company and that the above amount is considered good and recoverable and hence no provision is made as on 31st March 2018.

b) The company executed a construction contract at Dwaraka for M/s HSCC (India) Limited, a project of the Government of India, in respect of which the company has receivables of Rs 0.60 Crores and work in progress of Rs 0.67 Crores as on 31st March, 2018. The company has filed arbitration claim and based on the same a sum of Rs 0.40 Crores is written off in books, being the amount not included in claim made. The management is of the opinion that the rest of the amount is considered good and recoverable and hence no provision is made as on 31st March 2018.

c) The Work in progress inventory of company as on 31st March, 2018 includes Rs 9.71 Crores in respect of EPC work done by the company to one of its subsidiary companies which is unbilled as on 31st March, 2018 and Advances recoverable include management fee of Rs 4.8 Crores charged on the said subsidiary company which is not acknowledged by the subsidiary. The management is confident that these amounts are recoverable in the future and hence considers it appropriate to carry forward the amount of Rs 9.71 Crores as work in progress and Rs 4.8 Crores as receivables as on 31st March, 2018.

Note 10

The company had pledged shares held in Karaikal Port Private Limited (KPPL) for the loan availed by KPPL. The lending Bank invoked the pledge of 202392000 Equity shares in earlier years, having total carrying cost of Rs 202.39 crores as on 31st March, 2018. Edelweiss ARC has restructed KPPL loan whereby shares held by Marg Limited in KPPL will be reinstated thereupon will be pledged back to EARC. As per the EARC, they have to be allotted shares for their partial debt outstanding wherein post conversion, KPPL will not be a subsidiary of Marg Limited.

Note 11

The company could not obtain Balance Confirmation or statement of account from the lenders of certain equipment loans. Hence the reconciliation could not be carried out for the year ended 31st March 2018. The company has provided for interest at contractual rates.

Note 12

The company could not obtain Balance Confirmation or statement of account of Certain banks current/other accounts maintained with various banks since those bank accounts were attached by the Income tax investigation wing. The company has initiated necessary actions to uplift the attachment.

Note 13(b) INFORMATIONS UNDER MICRO, SMALL AND MEDIUM ENTERPRISES DEVELOPMENT ACT, 2006

The Company has not received information from vendors regarding their status under the Micro, Small and Medium Enterprises Development Act, 2006 and hence disclosures relating to amounts unpaid as at the year end together with interest paid / payable under this Act have not been given.

Note 14

In the opinion of the Management, Current Assets, Loans & Advances have a value on realization equal to the amount at which they are stated in the Balance Sheet and provision for all known liabilities has been made.

NOTE 15 : SEGMENT REPORTING

As per Indian Accounting Standard on "Segment Reporting", segment information has been provided under the Notes to Consolidated Financial S

NOTE 16 : REMUNERATION TO DIRECTORS:

As the company has incurred losses for the Financial Year 2017-18 no remuneration is paid to the Managing Director. (Previous Year NIL).

NOTE 17 : NON-CASH TRANSACTIONS

Bank Guarantees invoked during the year amounting to Rs 5.92 Crores have been included in liability to banks as on 31st March 2018 and treated as Non cash transactions.

NOTE 18 : OPERATING LEASES

a) Cancelable Lease:

Total rental charges under cancelable operating lease was Rs 0.065 Crores year ended 31-Mar-18 (Previous year Rs 0.61 Crores).

NOTE 19 : INFORMATIONS PERSUANT TO SECTION 129(3) OF COMPANIES ACT 2013:

Information of salient features of financial statements of subsidiaries required under Section 129(3) of the Companies Act, 2013 -(a) capital (b) reserves (c) total assets (d) total liabilities (e) details of investments (except in case of investment in subsidiaries) (f) turnover (g) profit (loss) before taxation (h) provision for taxation (i) profit (loss) after taxation and (j) proposed dividend for each subsidiary is furnished in Annexure B to the accounts.

NOTE 20 : INFORMATIONS PERSUANT TO REGULATION 34 (3) OF SEBI(LODR) REGULATION 2015

Disclosure as required by Regulation 34(3) of the SEBI (LODR) regulations 2015 for loans and advances given by the company are given in Annexure A.

NOTE 21 : INFORMATIONS PERSUANT TO PART II OF SCHEDULE III OF COMPANIES ACT:

The activities of the company are not capable of being expressed in any generic unit and hence, it is not possible to give the quantitative details required under Paragraphs 3, 4C and 4D of Part II of Schedule III of the Companies Act 2013.

NOTE 22 : PRESENTATION OF PREVIOUS YEAR'S FIGURE

Previous year's figures have been regrouped / reclassified / rearranged wherever necessary to bring them in conformity with the current year figures.

Note 23- First time adoption of Ind AS

These standalone IND AS financial statements, for the year ended March 31 2018 have been prepared in accordance with Ind AS. For the purpose of transition to Ind AS, the company has complied with Ind AS 101

- "First time adoption of Indian Accounting

Standards" for exemptions and exceptions, on transition date (i.e. April 1, 2016) and Indian GAAP is the previous GAAP followed by the company. The transition to Ind AS has resulted in changes in the presentation of financial statements, disclosures in the notes and accounting policies and principles. The accounting policies set out in Note 2 have been applied in preparing the financial statements for the year ended March 31, 2018 and the comparative information.

Exceptions

Deemed cost for investments in Subsidiaries, associates and Other entities: The company has elected to continue with the carrying value for all its investments in subsidiaries and associates as of April 1, 2016 measured under Indian GAAP as deemed cost as of April 1, 2016 (transition date)

Deemed Cost for Property,Plant and Equipment and Investment Property. The company has elected to continue with the carrying value of Property, Plant and Equipment and Investment Property measured under Indian GAAP as deemed cost as of April 1 2017( transition date)

Note 24- First time adoption of Ind AS

These standalone IND AS financial statements, for the year ended March 31 2018 have been prepared ii accordance with Ind AS. For the purpose of transition to Ind AS, the company has complied with Ind AS 10'

- "First time adoption of Indian Accounting

Standards" for exemptions and exceptions, on transition date (i.e. April 1, 2016) and Indian GAAP is thi previous GAAP followed by the company. The transition to Ind AS has resulted in changes in th presentation of financial statements, disclosures in the notes and accounting policies and principles. Th accounting policies set out in Note 2 have been applied in preparing the financial statements for the yea ended March 31, 2018 and the comparative information.

Exceptions

Deemed cost for investments in Subsidiaries, associates and Other entities: The company has elected to continue with the carrying value for all its investments in subsidiaries and associates as of April 1, 2016 measured under Indian GAAP as deemed cost as of April 1, 2016 (transition date)

Deemed Cost for Property, Plant and Equipment and Investment Property. The company has elected to continue with the carrying value of Property, Plant and Equipment and Investment Property measured under Indian GAAP as deemed cost as of April 1 2017( transition date).