Marg Ltd. - Quarterly/Annual Result Disclosures and Notes dated 31 Dec 2019

Notes to Statement





1

The NCLT has allowed the petition filed by financial creditor and ordered to commence corporate insolvency resolution process against New Chennai Township Private Limited being a wholly owned subsidiary under I&B Code 2016 in NCLT Order No. CP/636/(IB)/CB/2017 dated 05th July,2019. The NCLT has appointed Mr. L K Sivaramakrishnan, Resolution Professional (IBBI Registration Number IBBI/IPA-001/IP-P00045/2017-18/0119) vide order dated 05/07/2019. The public notice was given. Pursuant to Section 17 of the IBC, 2016 the powers of Board of directors has been suspended and vested with IRP.

2

Tata Capital limited, Financial Creditor, file a petition u/s 7 of Insolvency and Bankruptcy Code, 2016 against the subsidiary company. The NCLT has allowed the petition filed by financial creditor and ordered to commence corporate insolvency resolution process against the company under I&B Code 2016 in NCLT Order No. CP/672/(IB)/2017 dated 20th March,2018. The NCLT has appointed Mr S. Rajendran as Interim Resolution Professional vide order dated 20/03/2018. The Corporate Resolution process commenced from 20th March, 2018. Mr S Rajendran has assumed the status of Resolution Professional (RP) on said date and issued a public notice was given on 23/03/2018. Pursuant to Section 17 of the IBC, 2016 the powers of Board of directors has been suspended and vested with IRP. The Committee of Creditors (COC) has been Constituted u/s 21 of IBC 2016 and first meeting of the COC is scheduled and held on 24th April, 2018. NCLT Chennai bench in its order dated 05.12.2018 ordering liquidation of Arohi Infrastrucsture Private Limited.

3

The above financial results have been reviewed by the audit committee and thereafter approved and taken on record by the Board of Directors in their respective meetings

4

The Statutory auditors of the company have conducted limited review of unaudited the above financial results of the company for the quarter ended 31st Decemeber 2019. A qualified report has been issued by them thereon.

5

The figures for the Quarter ended December 2019 are balancing figures between the unaudited figures in respect of half year on September 2019 and Quarter ended June 2019.

6

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

7

The Company has investments in certain subsidiaries and related parties aggregating Rs. Rs. 566.92 Crore and loans and receivables outstanding aggregating Rs.558.61 lacs as at December 31, 2019. While such entitles have incurred significant losses and/or have negative net worth as at December 31, 2019, the underlying projects in such entities are in the early stages of real estate development and are expected to achieve adequate profitability on substantial completion and/ or have current market values of certain properties which are In excess of the carrying values. The Company considers its investments and loans in such entities as long term and strategic in nature. Accordingly, no provision is considered necessary towards diminution In the value of the Company's investments in such entitles and for expected credit losses In respect of loans and advances advanced to such entities, which are considered good and fully recoverable.

8

The company and Edelweiss ARC (EARC) agreed to restructure our debt repayment proposal. As a condition to the proposal, we have alloted Equity Shares on a Preferential allotment/Private placement basis for part debt convert to equity and balance to be realised (as part as sustainable and unsustainable) by liquidating collateral assets offered over the period of time. On getting the revised OTS sanction, definite agreement has to be executed.We have not provided interest on loans assigned to EARC during the year.

9

The Company did not provided for interest for the quarter and nine months ended 31st December, 2019 on certain loans that are assigned to ARC, the managament states that its 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 quarter and nine months ended 31st December 2019.

10

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 for the quarter and nine months ended 31st December 2019. The Company has advanced an amount of Rs 360.24 Crores (PYRs 352.58 Crores) as subordinated loan to the subsidiary and Rs 68.96 Crores (Rs 67.40 Crores) is carried forward as receivables for the quarter and nine months ended 31st December 2019. The said subsidiary has incurred losses which have resulted in negative net-worth for the quarter and nine months ended 31st December 2019. No Interest is provided during the year on loan receivable from subsidary.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 for the quarter and nine months ended 31st December 2019.The NCLT has allowed the petition filed by financial creditor and ordered to commence corporate insolvency resolution process against the company under I&B Code 2016 in NCLT Order No. CP/636/(IB)/CB/2017 dated 05th July,2019. The NCLT has appointed Mr. L K Sivaramakrishnan, Resolution Professional (IBBI Registration Number IBBI/IPA-001/IP-P00045/2017-18/0119) vide order dated 05/07/2019. The public notice was given. Pursuant to Section 17 of the IBC, 2016 the powers of Board of directors has beensuspended and vested with IRP.

11

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 quarter and nine months ended 31st December 2019.. The Company has advanced an amount of Rs 45.69 Crores (PY Rs 44.75 Crores) as subordinated loan to the subsidiary and Rs 57.54 Crores (PY Rs 59.74 Crores) is carried forward as receivables quarter and nine months ended 31st December 2019..No Interest is provided during the year on loan receivable from subsidary. The Mall project of the subsidiary 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 considerednecessary at this stage in respect of investments, loans and receivables outstanding from the said subsidiary company quarter and nine months ended 31st December 2019..

12

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 for the quarter and nine months ended 31st December 2019.The Company has advanced an amount of Rs 49.25 Crores (PY Rs 42.87 Crores) as loan to the subsidiary and Rs 16.38 Crores (PY Rs 17.06 Crores) is carried forward as receivables quarter and nine months ended 31st December 2019. The subsidiary Company has negative net-worth as quarter and nine months ended 31st December 2019.. 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 for the quarter and nine months ended 31st December 2019.

13

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 for the quarter and nine months ended 31st December 2019, which have provided land owned by them as security for the loans availed from lenders. No Interest is provided during the year on loan receivable from subsidary.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 for the nine months ended 31st December 2019.

14

The Company has debt repayment obligations (Including interest thereon) within next twelve months. The Company has also Incurred net cash losses for more than 3 years due to sluggish demand in the real estate sector. These could result in significant uncertainty on its ability to meet these debt obligations and continue as going concern. The management is addressing this issue robustly and the Company has generally met its debt obligations. The Management Is confident that they will be able to arrange sufficient liquidity by restructuring of the existing loans terms, monetization of non•core assets and mobilisation of additional funds. Accordingly, the Standalone Unaudited Financial Results are prepared on a going concern basis.