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Notes to Accounts of Asit C Mehta Financial Services Ltd.

Mar 31, 2015

Note 1. :- Based on an Expert opinion , the depreciation on the revaluation amount has been debited to the Revaluation Reserve account instead of debiting to Profit and loss account.

Notes:

a) The above loans including current maturities are secured by: i) Equitable mortgage of Office premises bearing nos 404B,504B and 604B at 'Nucleus House' Andheri E, Mumbai for the loans availed from a bank; ii) A deed of mortgage for Office premises located at 'Nucleus House', 'A' Wing, 3rd foor to 7th Floor (Previous year entire "A" wing containing ground foor to 7th Floor) Andheri East, Mumbai and also by irrevocable and unconditional personal guarantees of Mr. Asit C. Mehta and Mrs. Deena A Mehta Directors of the Company. iii) Secured by Equitable / registered mortgaged of the properties located at Nucleus House "B" Wing, 2nd and7th Floor - Rate of Interest -13% Repayable in 180 Monthly installment including interest.

b) Repayment terms of outstanding long-term borrowings (excluding current maturities) as on 31.3.2015 i) Repayment of Term Loan from STCI Finance Ltd : Bullet payment - May, 2016; ii) Repayment of Term Loan of Edelweiss Housing Finance Ltd in 180 monthly installments of Rs.7,59,146 per month commencing from May' 2014

2.a) The Company received pay orders valuing to Rs.50.72 lacs from a customer in the financial year 1994-95 in respect of Money Changing business that were dishonored by a nationalized bank as per the instructions of Directorate of Revenue & Intelligence. The Company had challenged the proceeding before the Customs, Excise and Gold (Control), Appellate Tribunal, Mumbai (CEGAT) which gave the ruling in favour of the Company for which the company has furnished a bank guarantee of Rs.26.86 lacs (previous year Rs.26.86 lacs). The Customs Department fled a reference petition before the Hon'ble High Court of Judicature at Bombay and the same is pending for disposal.

During the financial year 2007-08, the Company received an order imposing a penalty of Rs.100 lacs from the Office of the Special Director of Enforcement holding Company guilty in respect of defiance with the instructions contained in the FLM Memorandum. The Company contends that it has complied with the relevant regulations of the Reserve Bank of India as contained in FLM – Memorandum of Instructions to Full-Fledged Money Changers. The Company filed an appeal before the Appellate Tribunal for Foreign Exchange (ATFE) contesting the order which is pending.

b) The Service Tax Department had raised a demand of Rs.67,98,386/-, reflected above in contingent liability, by passing an Ex parte order dated 11th April 2008. The Company has preferred an appeal and the same is still pending and the management, based on expert advice, is confident that the demand is not sustainable and hence no provision for the same is made in the books of accounts.

3. The Company has not received any intimation from the 'suppliers' regarding their status under the Micro, Small and Medium Enterprises Development Act, 2006 and therefore no such disclosure under the said act is considered necessary. This has been relied upon by the auditors

4. Disclosures under Accounting Standards 28.1 Employee Benefits plan

a. Post-employment benefit plans Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.

For defined benefit schemes, the cost of providing Benefits is determined using the Projected Unit Credit Method, with actuarial valuations being carried out at each balance sheet date. Actuarial gains and losses are recognized in full in the Statement of Profit and Loss for the year in which they occur. Past service cost is recognized immediately to the extent that the Benefits are already vested and otherwise is amortized on a straight line basis over the average period until the Benefits become vested.

The retirement benefit obligations recognized in the balance sheet represents the present value of the defined benefit obligations as adjusted for unrecognized past service cost.

Note: Since the leave encashment liability did not exist at the year end figures of reporting period are not given.

The above expenses have been recognized under the 'Employee benefit expense' in the Statement of Profit and loss.

5. Segment Information

The primary and secondary reportable segments are business segments and geographical segments respectively. Business Segments:

a. Investment activities

b. Advisory and Consultancy services

There is no reportable geographical segment since all the business activities are in India.

6. Related parties transactions

A) Related parties where control exists:

i) Wholly Owned Subsidiary: Nucleus IT Enabled Services Ltd (formerly known as Nucleus GIS And ITES Ltd) ii) Asit C Mehta Investment Intermediates Ltd -

a) as Associate concern upto 14.12.14;

b) as Subsidiary company from 15.12.2014.

B) Related parties where Significant influence exists and where transactions have taken place:

- Common control:- - Asit C Mehta Forex Private Limited

- Asit C Mehta Real Estate Services Pvt. Ltd. (Formerly known as All Alertz.com (India) Pvt. Ltd.)

C) Key Management Personnel

Mr. Asit C Mehta and Mrs. Deena A. Mehta

7. Loans and advances include Balance with Nucleus Stock Trust representing Rs.118,985 (Previous year: Rs.127,251) equity shares of the company issued pursuant to the Scheme of amalgamation approved by the Hon'ble Bombay High Court vide its order dated February 10, 2006. The Company is the sole beneficiary in Nucleus Stock Trust.

8. As at 31st March, 2015, there was a complete erosion in the net worth of Nucleus IT Enabled Services Ltd (a wholly-owned subsidiary of the Company) in which investment at the cost of Rs.300 lacs, in 30 lacs equity shares of Rs.10 each have be made by the Company. However, the Company is of the opinion that the above investment is strategic and long-term in nature and diminution, if any, in the value of investments is temporary in nature and as a consequence no provision for diminution in the value of Equity shares of Nucleus IT Enabled Services Ltd is made.

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


Mar 31, 2014

1. Share Capital

a) Details of forfeited shares

* these shares were originally issued by erstwhile Nucleus Netsoft And GIS (India) Ltd which was amalgamated with the Company.

b) The Company has only one class of shares referred to as equity shares having a par value of Rs 10/- per share. Each holder of equity shares is entitled to one vote per share.

In the event of liquidation of the Company, the holders of the equity shares will be entitled to receive remaining assets of the Company after distribution of all preferential amount. The distribution will be in proportion to number of equity shares held by shareholders.

2. Long term Borrowings - Secured

a) The above loans including current maturities are secured by:

i) equitable mortgage of Office premises bearing nos 404B,504B and 604B at ''Nucleus House'' Andheri E, Mumbai for the loans availed from a bank;

ii) a deed of mortgage for Office premises located at ''Nucleus House'', ''A'' Wing, Andheri (E), Mumbai and also by the personal guarantees of Mr. Asit C. Mehta and Mrs. Deena A Mehta - directors of the Company with a undertaking for non-disposal of their shareholding in the Company during the tenor of the loan without the prior approval of STCI Finance Ltd.

b) Repayment terms of outstanding long-term borrowings (excluding current maturities) as on 31.3.2014

i) Repayment term of Term Loans from a Bank

* in quarterly instalments of Rs 7,92,500 each commencing from May, 2015

ii) Repayment of Term Loan from STCI Finance Ltd:

* Nov, 2015 Rs 500 lacs; and May, 2016 Rs 1000 lacs;

3. Depreciation and amortization

Consequent to the revaluation there is an additional charge of depreciation of Rs. 61,12,279 (Previous Year Rs. 61,12,279) and an equivalent amount has been recouped from Revaluation Reserve Account.

Note: (i) Details of sum added on revaluation during the preceding 5 years

* During these years no addition on revaluation was made and therefore no information is given

4. Contingent liabilities (to the extent not provided for)

Particulars As at March 31, As at March 31, 2014 2013

Service Tax Matter under dispute 67,98,386 67,98,386

FERA matter (refer Note 7) 100,00,000 100,00,000

Disputed Property Taxes 19,00,810 14,00,424

5. The Company received pay orders valuing to Rs 50.72 lacs from a customer in the financial year 1994-95 in respect of Money Changing business that were dishonored by a nationalized bank as per the instructions of Directorate of Revenue & Intelligence. The Company had challenged the proceeding before the Customs, Excise and Gold (Control), Appellate Tribunal, Mumbai (CEGAT) which gave the ruling in favour of the Company for which the company has furnished a bank guarantee of Rs.26.86 lacs (previous year Rs 26.86 lacs). The Customs Department filed a reference petition before the Hon''ble High Court of Judicature at Bombay and the same is pending for disposal.

During the financial year 2007-08, the Company received an order imposing a penalty of Rs 100 lacs from the Office of the Special Director of Enforcement holding Company guilty in respect of defiance with the instructions contained in the FLM Memorandum. The Company contends that it has complied with the relevant regulations of the Reserve Bank of India as contained in FLM - Memorandum of Instructions to Full-Fledged Money Changers. The Company filed an appeal before the Appellate Tribunal for Foreign Exchange (ATFE) contesting the order which is pending.

6. The Company has not received any intimation from the ''suppliers'' regarding their status under the Micro, Small and Medium Enterprises Development Act, 2006 and therefore no such disclosure under the said act is considered necessary. This has been relied upon by the auditors

7. Disclosures under Accounting Standards

8. Employee benefits plan

a. Post-employment benefit plans

Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.

For defined benefit schemes, the cost of providing benefits is determined using the Projected Unit Credit Method, with actuarial valuations being carried out at each balance sheet date. Actuarial gains and losses are recognized in full in the Statement of Profit and Loss for the year in which they occur. Past service cost is recognized immediately to the extent that the benefits are already vested and otherwise is amortized on a straight line basis over the average period until the benefits become vested.

The retirement benefit obligations recognized in the balance sheet represents the present value of the defined benefit obligations as adjusted for unrecognized past service cost.

b. Short-term employee benefits

The undiscounted amount of short-term employee benefits expected to be paid in exchange for the services rendered by employees is recognized during the period when the employee renders the service.

Note: Since the leave encashment liability did not exist at the beginning of the year figures of previous year cannot be given.

The above expenses have been recognised under the ''Employee benefit expense'' in the Statement of Profit and Loss.

The actual calculations used to estimate commitments and expenses are based on following assumptions

9. Segment Information

The primary and secondary reportable segments are business segments and geographical segments respectively.

Business Segments:

a. Investment activities

b. Advisory and Consultancy services

There is no reportable geographical segment since all the business activities are in India.

Note: Segment reporting was not applicable in the previous year and hence the figures of the previous year are not given above.

10. Related parties transactions

a. Related parties where control exists:

i) Wholly Owned Subsidiary: Nucleus IT Enabled Services Ltd (formerly known as Nucleus GIS And ITES Ltd)

b) Related parties where significant influence exists and where transactions have taken place:

* Associate concern: Asit C Mehta Investment Intermediates Limited

* Common control.

* Asit C Mehta Forex Private Limited

* All Alertz.com Private Limited

c) Key Management Personnel

Mr. Asit C Mehta and Mrs. Deena A. Mehta

d) Transcations with related parties

11. Earnings per share:

The basic earnings per share is computed by dividing the net profit after tax attributable to equity shareholders for the year by the weighted average number of equity shares outstanding during the reporting year.

12. Loans and advances include Balance with Nucleus Stock Trust representing 127,251 (Previous year: 127,251) equity shares of the company issued pursuant to the Scheme of amalgamation approved by the Hon''ble Bombay High Court vide its order dated February 10, 2006. The Company is the sole beneficiary in Nucleus Stock Trust.

13. As at 31st March, 2013, there was a complete erosion in the net worth of Nucleus IT Enabled Services Ltd (formerly known as Nucleus GIS And ITES Ltd) (a wholly-owned subsidiary of the Company) in which investment at the cost of Rs. 300 lacs in

14. lacs equity shares of Rs. 10 each have be made by the Company. However, the Company is of the opinion that the above investment is strategic and long-term in nature and diminution, if any, in the value of investments is temporary in nature and as a consequence no provision for diminution in the value of Equity shares of Nucleus IT Enabled Services Ltd is made.

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


Mar 31, 2013

1. Corporate Information:

The Company is a public limited company domiciled and headquartered in India and is incorporated under the provisions of Companies Act, 1956. The shares of the Company are listed on BSE Ltd. The Company holds investments exclusively of the group companies and earns dividend/interest from the same as and when declared/ due. The Company also earns rental income from the properties given on lease to the group companies. The Company has classified the aforesaid business as an ''investment activities''.

2. The Company received pay orders valuing to Rs 50.72 lacs from a customer in the financial year 1994-95 in respect of Money Changing business that were dishonored by a nationalized bank as per the instructions of Directorate of Revenue & Intelligence. The Company had challenged the proceeding before the Customs, Excise and Gold (Control), Appellate Tribunal, Mumbai (CEGAT) which gave the ruling in favour of the Company for which the company has furnished a bank guarantee of Rs.26.86 lacs (previous year Rs 26.86 lacs). The Customs Department filed a reference petition before the Hon''ble High Court of Judicature at Mumbai and the same is pending for disposal.

During the financial year 2007-08, the Company received an order imposing a penalty of Rs 100 lacs from the Office of the Special Director of Enforcement holding Company guilty in respect of defiance with the instructions contained in the FLM Memorandum. The Company contends that it had complied with the relevant regulations of the Reserve Bank of India as contained in FLM - Memorandum of Instructions to Full-Fledged Money Changers. The Company filed an appeal before the Appellate Tribunal for Foreign Exchange (ATFE) contesting the order which is pending.

3. The Company has not received any intimation from the ''suppliers'' regarding their status under the Micro, Small and Medium Enterprises Development Act, 2006 and therefore no such disclosure under the said act is considered necessary. This has been relied upon by the auditors

4. Disclosures under Accounting Standards

4.1 Employee benefits plan3

a. Post-employment benefit plans

Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.

For defined benefit schemes, the cost of providing benefits is determined using the Projected Unit Credit Method, with actuarial valuations being carried out at each balance sheet date. Actuarial gains and losses are recognized in full in the Statement of Profit and Loss for the year in which they occur. Past service cost is recognized immediately to the extent that the benefits are already vested and otherwise is amortized on a straight line basis over the average period until the benefits become vested.

The retirement benefit obligations recognized in the balance sheet represents the present value of the defined benefit obligations as adjusted for unrecognized past service cost.

b. Short-term employee benefits

The undiscounted amount of short-term employee benefits expected to be paid in exchange for the services rendered by employees is recognized during the period when the employee renders the service.

Note: The Company had only one employee during the year and the liability for the leave encashment, if any, is provided on actual and not actuarial basis and therefore no working is given.

The above expenses have been included under ''contribution to provident and other fund'' under the employee''s cost in the profit and loss account. .

The actuarial calculations used to estimate commitments and expenses in respect of gratuity are based on the following assumptions which if changed, would affect the commitment''s size, funding requirements and expense.

4.2 Segment information

The Company operates into one segment only as detailed in note 1 above.

4.3 Related parties transactions

a. Related parties where control exists:

Wholly Owned Subsidiaries:- Nucleus GIS, Inc. USA (dissolved during the previous year) and Nucleus GIS And ITES Ltd

b. Related parties where significant influence exists and where transactions have taken place:

Associate Company - Asit C Mehta Investment Intermediates Ltd - Associate

All Alertz.com (India) Private Ltd - A Group Company Asit C Mehta Forex Pvt. Ltd A Group Company

c. Key Management Personnel (KMP)

Asit C Mehta - Director Deena A Mehta - Director

Figures for previous year are given in brackets

4.4 Earnings per share:

The basic earnings per share is computed by dividing the net profit after tax attributable to equity shareholders for the year by the weighted average number of equity shares outstanding during the reporting year.

5. a) Loans and advances include Balance with Nucleus Stock Trust representing 127,251 (Previous year: 127,901) equity shares of the company issued pursuant to the Scheme of amalgamation approved by the Hon''ble Bombay High Court vide its order dated February 10, 2006. The Company is the sole beneficiary in Nucleus Stock Trust.

b) During the year 650 equity shares of the company (previous year: 198) were sold in the open market by Nucleus Stock Trust and the proceeds thereof were received by the Company. The gain realized on the sale aggregated to Rs. 24,143 (previous year Rs. 7,765/-) has been credited to the Statement of Profit and Loss.

6. As at 31st March, 2013, there was a complete erosion in the Net worth of Nucleus IT Enabled Services Ltd (formerly known as Nucleus GIS And ITES Ltd) (a wholly-owned subsidiary of the Company) in which investment at the cost of Rs. 300 lacs in 30 lacs equity shares of X 10 each have be made by the Company. However, the Company is of the opinion that the above investment is strategic and long-term in nature and diminution, if any, in the value of investments is temporary in nature and as a consequence no provision for diminution in the value of Equity shares of Nucleus IT Enabled Services Ltd is made.

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


Mar 31, 2010

1. Discontinued Operations

During the previous financial year i.e. 2008-09, the Company had transferred the Information Technology Enabled Services (ITeS) business to its wholly-owned subsidiary Nucleus GIS And ITES Ltd at net sale consideration of Rs 75,25,605.

2. The Company had received pay orders valuing to Rs 50.72 lacs from a customer in the financial year 1994-95 in respect of Money Changing business that were dishonored by a nationalized bank as per the instructions of Directorate of Revenue & Intelligence. The Company had challenged the proceeding before the Customs, Excise and Gold (Control), Appellate Tribunal, Mumbai (CEGAT) which gave the ruling in favour of the Company for which the company has furnished a bank guarantee of Rs.26.86 lacs (previous year Rs. 26.86 lacs). The Customs Department filed a reference petition before the Honble High Court of Judicature at Bombay and the same is pending for disposal. The Company has also filed a suit with the Honble High Court of Judicature at Bombay against the bank concerned seeking amongst others, a direction to the bank to pay interest on the amount of dishonored pay orders. As at the year end the case is pending for disposal with the Honble High Court of Judicature at Bombay.

During the financial year 2007-08, the Company received an order imposing a penalty of Rs 100 lacs from the Office of the Special Director of Enforcement holding Company guilty in respect of defiance with the instructions contained in the FLM Memorandum. The Company contends that it has complied with the relevant regulations of the Reserve Bank of India as contained in FLM - Memorandum of Instructions to Full-Fledged Money Changers. The said order also stipulated to pre-deposit the penalty for preferring an appeal against the said order. The Company filed an appeal before the Appellate Tribunal for Foreign Exchange (ATFE) contesting the order and also for waiver of the condition to pre-deposit the penalty. The ATFE rejected the Companys request for the pre-deposit of the penalty and to which the Company filed a Writ petition before the Bombay High Court which waived the pre-deposit of the penalty against furnishing a bank guarantee of equivalent sum and the same is furnished by the Company. The said appeal is pending before ATFE.

On the basis of legal advice obtained, the Management is of the view that the order of the Special Director is erroneous, perverse, and bad in law. The Company had complied with the RBI regulations as stipulated in the FLM Memorandum.

3. Retirement Benefits:

a. Post-employment benefit plans

Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.

For defined benefit schemes, the cost of providing benefits is determined using the Projected Unit Credit Method, with actuarial valuations being carried out at each balance sheet date. Actuarial gains and losses are recognized in full in the Profit and Loss account for the period in which they occur. Past service cost is recognized immediately to the extent that the benefits are already vested, and otherwise is amortized on a straight line basis over the average period until the benefits become vested.

The retirement benefit obligations recognized in the balance sheet represents the present value of the defined benefit obligations as adjusted for unrecognized past service cost.

b. Short-term employee benefits

The undiscounted amount of short-term employee benefits expected to be paid in exchange for the services rendered by employees is recognized during the period when the employee renders the service.

4. Related Parties

a. Related parties where control exists

Wholly Owned Subsidiaries - Nucleus GIS, Inc. USA

- Nucleus GIS And ITES Ltd

b. Related parties where significant influence exists and where transactions have taken place:

Associate Company - Asit C Mehta Investment Intermediates Ltd - Associate All Alertz.com (India) Private Ltd - A Group Company

c. Key Management Personnel (KMP) Asit C Mehta - Director

Deena A Mehta - Director

8. a) Loans and advances include Balance with Nucleus Stock Trust representing 150,514 (Previous year: 269,900) equity shares of

the company issued pursuant to the Scheme of amalgamation approved by the Honble Bombay High Court vide its order dated February 10, 2006 to Nucleus Stock Trust, in which the Company is the sole beneficiary.

b) During the year 1,19,386 shares of the company (previous year: Nil) were sold in the open market by Nucleus Stock Trust and the proceeds therefrom were received by the Company. The gain realised on these sales aggregated to Rs 38, 08,423/- which has been credited to Profit and Loss Account.

5. During the year interest amounting to Rs. NIL (previous year Rs. 6,67,585) paid on term loans has been capitalized and stated under capital work in progress at the year end.

6. The Company has given a Corporate Guarantee and also created a charge on certain immoveable properties, aggregating to Rs 420 lacs, to a bank for the credit facilities sanctioned to Nucleus GIS And ITES Ltd (a wholly-owned subsidiary).

7. As at the year end there are no amounts due and outstanding, to be credited to Investors Education and Protection Fund.

8. During the year the Company operated in a single segment wherein the rentals earned on the premises given on Leave and Licence basis has been considered as "investment activity". As a consequence, no segment reporting is applicable for the current year.

During the previous year the Company had identified IT Enabled Services and Investment as primary business segments in compliance with the Accounting Standard AS -17 Segment Reporting, considering the Management structure, the internal financial and management reporting and the differential risks and returns of products in each segment. The Company had considered business segment as primary segment for disclosure.

9. Earnings Per Share:

The basic earnings per share is computed by dividing the net profit attributable to equity shareholders for the year by the weighted average number of equity shares outstanding during the reporting year. Diluted earnings per share are computed using the weighted average number of equity shares that could have been issued on the conversion of all dilutive potential equity shares. The dilutive potential equity shares are adjusted for the proceeds receivable, had the shares been actually issued at fair value.

Dilutive potential equity shares are deemed converted as of the beginning of the year, unless they have been issued at a later date.

10. The Company has not received any intimation from the suppliers regarding their status under the Micro, Small and Medium

Enterprises Development Act, 2006 and therefore no such disclosure under the said act is considered necessary. This has been relied upon by the auditors.

11. Previous year figures are restated / regrouped / rearranged wherever necessary in order to confirm to current years groupings and classifications.

 
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