Directors Report of Asit C Mehta Financial Services Ltd.

Mar 31, 2014

Dear Members

The Directors present the 30th Annual Report together with the audited accounts of the Company for the year ended 31st March, 2014.

1. FINANCIAL RESULTS:

Rs in lacs

STANDALONE CONSOLIDATED

2013-14 2012-13 2012-13

Income from Operations 248.48 186.26 451.40 346.26

Other Income 7.68 10.41 8.50 11.52

Total Income 256.16 196.67 459.90 354.78

Profit before depreciation, interest and tax 88.94 150.21 68.63 120.71

Less: Depreciation 21.08 21.76 29.29 33.06

Interest 227.30 198.58 270.79 234.25

Tax Expense/(Credit) (6.90) (6.54) (6.90) (6.85)

Profit/(Loss) After Tax (152.54) (63.59) (224.55) (139.75)

Profit/(loss) of share in Associate concern NA NA 0 (167.83)

Profit after tax and share in Associate concern NA NA (224.55) (307.58)

Add: Balance brought forward - (610.60) (303.02)

Balance available for appropriation (152.54) (63.59) (835.15) (610.60)

Which the Directors have appropriated as:

Adjusted against General Reserve 120.11 63.59 -

* Balance to be carried forward (32.43) - (835.15) (610.60)

2. DIVIDEND

The Board of Directors does not recommend any dividend.

3. OPERATIONAL REVIEW

On a Standalone basis, the gross earnings rose to Rs 256.16 lacs from Rs 196.67 lacs. The year ended with a loss after tax of Rs 152.54 lacs as compared to Rs 63.59 lacs in the previous year.

The Company continues to explore the efforts for offering the Office premises on rental basis to banks/insurance Companies/Corporate(s). The Company offered advisory and consultancy services to certain clients and earned the fees aggregating to Rs 68.47 lacs from Advisory and Consultancy Division. During the year end, the Company purchased certain Office Premises from the Associate concern the cost of which (including stamp duty and other related expenses) aggregated to Rs 1271.32 lacs. The purchase was partly funded by raising a term loan in the current financial year i.e. 2014 15 from a NBFC for Rs 600 lacs. These premises have been offered for rent to the Associate concern from 1.4.2014 and the rental income has started accruing.

On a consolidated basis, the gross revenues were at Rs 460 lacs as compared to Rs 354 lacs in the previous year and loss after tax was at Rs 225 lacs as against Rs 140 lacs in the previous year. The overall consolidated loss aggregated to Rs 225 lacs (excluding share of loss from an Associate concern) as against loss of Rs 308 lacs in the previous year (including share of loss from an Associate concern)

The wholly-owned subsidiary - Nucleus IT Enabled Services Ltd engaged into ITeS services, showed a growth of 29% in the Income from Operations and the loss before depreciation and finance cost was reduced to Rs 5 .37 lacs as against loss of Rs 21.53 lacs in the previous year. The overall loss stood at Rs 72 lacs as against Rs 76 lacs in the previous year.

The share in loss of Associate concern stood at Rs 197 lacs as against loss of Rs 174 lacs in the previous year after considering inter group company transactions and the same were eliminated under the applicable Accounting Standard.

4. DIRECTORS'' RESPONSIBILITY STATEMENT

Pursuant to Section 217(2AA) of the Companies Act, 1956, the Directors to the best of their knowledge and belief confirm that:

a. in preparation of the annual accounts, the applicable accounting standards have been followed by the Company;

b. appropriate accounting policies have been selected and applied consistently and such judgments and estimates have been made that are reasonable and prudent so as to give true and fair view of the state of affairs of the Company as at 31st March, 2014 and of the loss of the Company for the year ended on that date;

c. proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; and

d. the annual accounts have been prepared on a ''going concern'' basis.

5. Fixed Deposits

The Company has not accepted any deposits within the meaning of Section 58A of the Companies Act, 1956 and the rules made thereunder.

6. INFORMATION PURSUANT TO SECTION 217 OF THE COMPANIES ACT, 1956

a) Conservation of energy, Technology absorption and adoption:

The operations of your Company involve low energy consumption. Energy conservation efforts are being pursued on a continuous basis. Close monitoring of power consumption is maintained to minimize wastage and facilitate optimum utilization of energy. The Company has not imported any technology nor incurred any expenditure on research and development of technology.

b) Particulars of employees:

The Company had no employee covered in accordance with the provisions of Section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975.

c) Foreign exchange earnings and outgo: Rs Nil

7. MANAGEMENT DISCUSSION AND ANALYSIS

The "Management Discussion and Analysis Report" is furnished separately and forms part of this Directors'' Report.

8. CORPORATE GOVERNANCE

A report on Corporate Governance as stipulated under Clause 49 of the Listing Agreement with the BSE Ltd, is annexed hereto and forms part of the Annual Report.

9. DIRECTORS

Prof. D Sunderajan resigned with effect from 31.7.2014 and Mr. Pundarik Sanyal was appointed on 31.7.2014 to fill the casual vacancy due to resignation of Prof. D Sunderajan. The Board places on record its appreciation for the services rendered by. Prof. D Sunderajan during his tenure as Director.

In accordance with the provisions of the Companies Act, 1956 and Company''s Articles of Association, Mr. A C Mehta and Mr. V G Ladha Vora retire by rotation at the ensuing Annual General Meeting and being eligible, offer themselves for re-election. The information on the particulars of the Directors seeking re-appointment as required under clause 49 of the Listing Agreement has been given in the Report on Corporate Governance.

In due compliance with the provisions of section 149 of the Companies Act, 2013, it is proposed to appoint Mr. Vijay G. Ladha, Dr. R Krishna Murthy and Mr. Pundarik Sanyal as Independent Directors on the Board of the Company. The appropriate resolutions for their appointment are being placed for the approval of the members at the ensuing Annual General Meeting.

10. SUBSIDIARY COMPANIES

In terms of General Circulars Nos 2/2011 and 3/2011 dated 8.2.2011 and 21.2.2011 respectively issued by the Ministry of Corporate Affairs under section 212(8) of the Companies Act, 1956 granting general exemption from attaching financials of the subsidiaries the same are not attached. These financials will be kept open for inspection by any shareholder at the registered office of the Company and will also be placed before the ensuing Annual General Meeting.

The relevant financial data of the subsidiary have been furnished under ''Details of Subsidiary'' forming part of this Annual Report.

11. CONSOLIDATED FINANCIAL STATEMENTS

In accordance with Accounting Standards 21 and 23 issued by the Institute of Chartered Accountants of India, the consolidated financial statement incorporating the operation of the Company, its subsidiary and associate concern have been attached hereto which form part of the Annual Report.

12. AUDITORS

The Company''s Auditors, Manek & Associates as the Statutory Auditor would retire at the ensuing Annual General Meeting and confirmed their eligibility and willingness to accept the office of the auditors, if reappointed. The Audit Committee and the Board recommends their reappointment as stated in the proposed resolution given in the Notice of the Annual General Meeting.

13. APPRECIATION

The Directors thank the banker, STCI Finance Ltd and shareholders for their continued support to the Company. The Directors also look forward for the continuing support from the shareholders.

FOR AND ON BEHALF OF THE BOARD

ASIT C. MEHTA CHAIRMAN Mumbai, July 31st, 2014 DIN: 00169048

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Mar 31, 2010

The Directors present the 26th Annual Report together with the audited accounts of the Company for the year ended 31st March, 2010.

1. FINANCIAL RESULTS:

Rs in lacs

STANDALONE CONSOLIDATED

2009 10 2008 09 2009 10 2008 09

Income from Operations 89.09 132.46 582.28 822.57

Other Income 88.02 130.88 52.27 51.07

Total Income 177.11 263.34 634.55 873.64

Profit before depreciation, interest and tax 139.56 83.28 76.85 183.2

Less: Depreciation 20.91 24.02 73.91 57.22

Interest 31.69 23.97 57.68 28.49

Tax Expense / (Credit) (14.70) 0.55 (21.04) 35.47

Profit/(Loss) After Tax 101.66 34.74 (33.71) 62.02

Profit / (loss) of share in Associate concern NA NA 15.93 (53.86)

Profit after tax and share in Associate concern NA NA (17.78) 8.16

Add: Balance brought forward 13.80 15.81 304.15 332.74

Balance available for appropriation 115.46 50.55 286.37 340.9

Which the Directors have appropriated as:

-Proposed Dividend 24.01 35.12 24.01 35.12

- Tax on Dividend 4.08 1.63 8.42 1.63

- Balance to be carried forward 87.38 13.80 253.94 304.15

2. DIVIDEND

The Board of Directors recommends a dividend of 5% on the Equity shares which would entail an outgo of Rs 28.09 lacs (including dividend tax).

3. OPERATIONAL REVIEW

On a Standalone basis, the earnings were mainly from rental income and the profit on partial sale of shares held by Trust whose sole beneficiary is the Company. The Company also earned marginal revenue from G-sec business. The gross earnings aggregated to Rs 177 lacs and profit after tax was at Rs 102 lacs.

The Company did not receive the approval from the Reserve Bank of India for its NBFC registration and as a consequence no activities relating to NBFC business was pursued.

On a consolidated basis, the gross revenues declined from Rs 874 lacs to Rs 634 lacs mainly due to drop in revenues from ITES business of Nucleus GIS And ITES Ltd (NGIL) - a wholly-owned subsidiary company. NGIL suffered a loss of Rs 101 lacs (after providing Rs 47 lacs for doubtful debt) as it revenues declined from 690 lacs in the previous year to Rs 553 lacs in the year under review. Immediate steps were taken to discontinue the loss making businesses and also the relevant management team was replaced in the last quarter of the year.

4. OUTLOOK

The Company would continue to earn steady rental and dividend income from the existing investments. The ITES business would be operated by NGIL. Barring unforeseen circumstance the outlook appears to be good.

5. DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to Section 217(2AA) of the Companies Act, 1956, the Directors to the best of their knowledge and belief confirm that:

i. in preparation of the annual accounts, the applicable accounting standards have been followed by the Company;

ii. appropriate accounting policies have been ^elected and applied consistently and such judgments and estimates have been made that are reasonable and prudent so as to give true and fair view of the state of affairs of the Company as at 31st March, 2010 and of the profit of the Company for the year ended on that date;

iii. proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; and

iv. the annual accounts have been prepared on a going concern basis.

6. FIXED DEPOSITS

The Company has not accepted any deposits within the meaning of Section 58A of the Companies Act, 1956 and the rules made there under.

7. INFORMATION PURSUANT TO SECTION 217 OF THE COMPANIES ACT, 1956

a) Conservation of energy, Technology absorption and adoption:

The operations of your Company involve low energy consumption. Energy conservation efforts are being pursued on a continuous basis. Close monitoring of power consumption is maintained to minimize wastage and facilitate optimum utilization of energy. The Company has not imported any technology nor incurred any expenditure on research and development of technology.

b) Particulars of employees:

The Company had no employee covered in accordance with the provisions of Section 217(2 A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975.

c) Foreign exchange earnings and outgo: Nil

8. MANAGEMENT DISCUSSION AND ANALYSIS

The "Management Discussion and Analysis Report" is furnished separately and forms part of this Directors Report.

9. CORPORATE GOVERNANCE

A report on Corporate Governance as stipulated under Clause 49 of the Listing Agreement with the Bombay Stock Exchange Ltd, is annexed hereto and forms part of the Annual Report.

10. DIRECTORS

In accordance with the provisions of the Companies Act, 1956 and Companys Articles of Association, Mrs. D A Mehta and Mr. K H Vora retires by rotation at the ensuing Annual General meeting and being eligible, offers themselves for re-election.

The information on the particulars of the Directors seeking re-appointment as required under clause 49 of the Listing Agreement has been given in the Report on Corporate Governance.

11. SUBSIDIARY COMPANIES

The audited financials of Nucleus GIS, Inc and Nucleus GIS And ITES Ltd for the year ended March 31, 2010 together with the Reports of the Directors and Auditors and the Statement pursuant to section 212 of the Companies Act, 1956 are attached.

12. CONSOLIDATED FINANCIAL STATEMENTS

In accordance with Accounting Standards 21 and 23 issued by the Institute of Chartered Accountants of India, the consolidated financial statement incorporating the operation of the Company, its subsidiary and associate concern have been attached hereto which forms part of the Annual Report.

13. AUDITORS

The Companys Auditors, Manek & Associates as the Statutory Auditor would retire at the ensuing Annual General Meeting and confirmed their eligibility and willingness to accept the office of the auditors, if reappointed. The Audit Committee and the Board recommends their reappointment.

14. APPRECIATION

The Directors thank the banker and shareholders for their continued support to the Company. The Directors also look forward for the continuing support from the shareholders.

For and on behalf of the Board of Directors

Asit C Mehta

Mumbai, 27th May, 2010 Chairman