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Notes to Accounts of Mangal Credit And Fincorp Ltd.

Mar 31, 2015

Corporate Information

Mangal Credit & Fincorp Limited (the company) is a public company domiciled in India and incorporated under the Companies Act, 1956. The company had obtained its license from Reserve Bank of India to operate as a Non Banking Financial Company (NBFC) on March 11, 1998 vide certifcate of registration no. 13.00329. In Previous Year, the Company was Systemically Important Non Deposit Taking NBFC (NBFC-ND-SI) but vide circular no. RBI/2014-15/37 DNBS (PD) CC No.382/ 03.02.001/2014-15 dated 1 July 2014 the company was removed from the category of NBFC-ND-SI. Apart from fnancing activity the Company is also engaged in activity of trading in jewellery. It's shares are listed on Bombay Stock Exchange (BSE) and Ahmadabad Stock Exchange (ASE).

NOTE 1: SEGMENT REPORTING

The Company has two business segments i.e. fnance activity and trading in jewellery activity. The segment information is being presented in consolidated fnancial statements.

NOTE 2

During last year the premises of the company were subjected to search and seizure proceedings u/s 132 of the Income Tax Act, 1961 alongwith the similar proceedings at the residential premises of the directors and also the premises of certain other group concerns. Cash of Rs. 7,50,000/- belonging to the company was seized during such proceedings, besides certain other papers, documents, books, electronic data which, according to management, does not contain any incriminating material. During the year notice under section 153A for fling of the returns of income for the F.Y. 2007-08 to 2012-13 were served in compliance of which returns of income have been fled by making a self assessment of undisclosed income at Rs. NIL in all the years. The Assessment Proceedings are pending as on date. The management is of the view that no additional tax liability shall arise as a result of such proceedings.

NOTE 3

The company has complied with norms prescribed by Reserve Bank of India vide circular no. RBI/2014- 15/299 DNBS (PD) CC No.002/ 03.10.001/2014-15 dated 10 Nov, 2014 for NBFCs-ND.

NOTE 4: DISCONTINUING OPERATIONS

On 1st March 2015, the Board of Directors announced a plan to dispose of Company's Trading Division, which was a separate segment as per AS 17, Segment Reporting. The disposal is consistent with the RBI Guidelines that an NBFC can not involve in trading business. For this the company has sold the entire segment fxed assets to Shree Mangal Abhushan Private Limited at Proft of Rs. 5,04,290/- and all its Assets including inventory and Liabilities has been disposed off. The following statement shows the revenue & expenses of continuing and discontinuing operations:

Sub Notes:

a. As defned in paragraph 2 (1) (xii) of the Non-Banking Financial Companies Acceptance of Public Deposits (Reserve Bank) Directions, 1998.

b. Provisioning norms shall be applicable as prescribed in the Non-Banking Financial (Non Deposit Accepting or Holding) Companies Prudential Norms (Reserve Bank) Directons, 2007.

c. All Accounting Standards and Guidance Notes issued by ICAI are applicable including for valuation of investments and other assets as also assets acquired in satisfaction of debt. However, market value in respect of quoted investments and break up/fair value/NAV in respect of unquoted investments should be disclosed irrespective of whether they are classifed as long term or current in (4) above.

NOTE 5:

Disclosure required as per clause 32 of Listing Agreement has been set out in a separate Annexure A2 attached to the fnancial statement.

NOTE 6: PREVIOUS YEAR FIGURES

Previous year fgures have also been regrouped, re-arranged and reclassifed wherever necessary to confrm to the current year's classifcation.


Mar 31, 2014

A) Rights attached to equity Shares

The Company has only one class of equity shares having face value of Rs.10/- per share. Each holder of equity share is entitled to one vote per share.

Every share is entitled to receive dividends in Indian Rupees, if declared.

In the event of liquidation of the Company, the shareholders of equity shares will be entitled to receive remaining assets of the company after distribution of the preferential amounts.

The distribution will be in proportion to the number of equity shares held by the shareholders.

e) Aggregate number and class of shares allotted as fully paid up pursuant to contract(s) without payment being 4,76,189 equity shares @ Rs. 210 per share amounting to Rs. 9,99,99,690/- issued under share swap basis. The detail of shares received is as under:

DIVIDEND

Dividend of Rs. 2 per share on Face Value of Rs. 10/- per share has been recommended for the FY 2013-14 (Dividend of Rs. 2 per share on face value of Rs. 10/- per share was provided in FY 2012-13)

2 The Company has not received any intimation from "suppliers'' regarding their status under the Micro, Small and Medium Enterprises Development Act, 2006 and hence disclosres, if any, relating to amounts unpaid as at the end of the year together with interest paid I payable as required under the said Act have not been furnished-

Notes; -

1 Vehicles represent 5 cars purchased by Company and teased to another company.

2 Adjusment of Rs. 5,38,919/- in the gross Block of vehicles has been made in respect of erroneous capitalisation of Value Added Tax (VAT) on purchase of Motor Cars since the Company is entitled to claim set off of Input Tax Credit against Lease Rentals. Correspondingly Prior Period Adjusment has been made in the amount of depreciation of Rs. 2,57,461/- charged on the said amount of VAT paid on purchase in the preceding financial years.

For the Previous Particulars Period ended Year ended 31.03.2014 31.03.2013

Rupees Rupees

(i) Contingent Liabilities - -

(a) Claims against company not acknowledged - - as debt

(b) Guarantees - -

(c) Other money for which the company is - - contingentally liable

(ii) Commitments

(a) Estimated Amounts of contracts remaining - - to be executed on capital account and not provided for

(b) Uncalled liability on shares and other - - investment partly paid up

(c) Other commitments - -

Notes Forming Part of the Financial Statements 26. Related Party

As required under the accounting standard of Related Party Disclosure (AS 18) issued by the Institute of Chartered Accountants of India, the disclosure of Related Party name & their transactions are as under:

Name of Related Parties and Relationships S. No. Related Parties A. Subsidiaries

1 Chakshu Realtors Pvt Ltd

2 Ekadanta Builders Pvt. Ltd

3 Indtrans Container Lines Pvt Ltd

4 Mangal Buildhome Pvt Ltd

5 Mangal Bullion Pvt Ltd

6 Mangal Compusolution Pvt Ltd

7 Mangal Entertainment Pvt Ltd

8 Mangal Globle Marble Pvt Ltd

9 Mangal Royal Jewels Pvt Ltd.

10 Mangal Synnove Energies Pvt Ltd

11 Mangal Timber Pvt Ltd

12 Mayur Abodes Ltd.

13 Satco Capital Markets Ltd

14 Shree Mangal Jewels Pvt Ltd

15 Shree Radhey Mangal Gold Chain Pvt Ltd

16 Shree Ratnamangal Jewels Pvt Ltd

17 Signature Sports & Entertainment Pvt Ltd

18 Standard Medserve Tpa Pvt Ltd

19 Swarn Bhavya Mangal Jewels Pvt Ltd

20 Viraasat Gems & Jewels (Retail) Pvt Ltd

B Associates

1 Scarled Computech Private Limited

2 GoldCrest Realty

3 Student films Festivals

4 Bliss Entertainment

5 Mangal Accad Synnove Energy

6 Swarn Mangal Jewels

C Companies / Others Under Common Control

1 Ally Insurance Brokers Private Limited

2 Bansiwala Real Estates Private Limited

3 Dhakad Proprieties & Financial Services PL

4 E-Ally Commodities India Private Limited

5 E-Ally Consulting India Private Limited

6 E-Ally Equities India Private Limited

7 E-Ally Research India Private Limited

8 E-Ally Securities India Private Limited

9 Ectech Informatics Private Limited

10 Karshma Metal Industries Private Limited

11 Mangal Meta Forging Private Limited

12 Mangal Recycling Private Limited

13 Shwet Developers Private Limited

14 Vijay Dwellers Private Limited

15 Mangal Charitable Trust

D Key Management Person

1 Sandeep Maloo Directors

2 Ajit Jain Directors

3 Meghraj Jain Directors

4 Labh Chand Maioo Directors

5 Neeta Maloo Directors

6 Sunil Ramachandran Nair Directors

7 Atul Jain Directors

Note 27: Segment Reporting

The Company has two business segments i.e. finance activity and trading in jewellery activity. The segment information is being presented in consolidated financial statements.

Note 28

During the year the premises of the company was subjected to search and seizure proceedings u/s 132 of the Income Tax Act, 1961 alongwith the similar proceedings at the residential premises of the directors and also the premises of certain other group concerns. Cash of Rs.7,50,000/- belonging to the company was seized during such proceedings, besides certain other papers, documents, books, electronic data which, according to management, does not contain any incriminating material. Accordingly, the management is of the view that no additional tax liability shall arise as a result of such proceedings.

Note 29

Non Compliance as to following norms prescribed by Reserve Bank of India vide circular no. RBI/2013-14/35 DNBS (PD) CC No.333/ 03.02.001 / 2013-14 dt. July 1, 2013 for systemically important Non-Deposit Accepting NBFC''s (NBFC-ND-SI) which have become applicable on the Company during the year:-

(i) The Capital Risk Adequacy Ratio (CRAR) of 15% is required to be maintained. As against this the CRAR of the Company as on 31.03.2014 is (-) 67.24%.

(ii) The Company is required to maintain exposure to single party / Group within the prescribed percentage of owned funds. As against this the Concentration of Advances and Investments as on 31.03.2014 is as under:-

(iii) The Company charged interest on monthly / by-monthly / quarterly / or annually as per the terms decided with the respective borrowers. Accordingly it is not complying with the norms regarding charging of interest on monthly / quarterly basis in certain cases.

Sub Notes

a. These disclosures are given only for certain items of assets and liabilities from the Balance sheet as required by the above circular and is not a complete depiction of the asset liability maturity position of the Company as at March 31, 2014

b. The asset maturity pattern are based on expected collections pattern of the Company based on past experience.

c. The requirement of ALM has become applicable to the Company for the first time on becoming "Systemically Important" in the F.Y. 2013-14.

Note 32

Schedule to the Balance Sheet of Non-Deposit Taking Non-Banking Financial Company

(as required in terms of paragraph 13 of Non-banking Financial (Non-Deposit Accepting or Holding) Companies Prudential Norms (Reserve Bank) Directions, 2007)

Sub Notes:

a. As defined in paragraph 2(i)(xii) of the Non-Banking Financial Companies Acceptance of Public Deposits (Reserve Bank) Directions, 1998.

b. Provisioning norms shall be applicable as prescribed in the Non-Banking Financial (Non Deposit Accepting or Holding) Companies Prudential Norms (Reserve Bank) Directons, 2007.

c. All Accounting Standards and Guidance Notes issued by ICAI are applicable including for valuation of investments and other assets as also assets acquired in satisfaction of debt. However, market value in respect of quoted investments and break up/fair value/NAV in respect of unquoted investments should be disclosed irrespective of whether they are classified as long term or current in (4) above.

Note 33: Disclosure required as per clause 32 of Listing Agreement has been set out in a separate annexure A2 attached to the financial statement.

Note 34: Previous Year Figures

Previous year figures have also been regrouped, re-arranged and reclassified wherever necessary to confirm to the current year''s classification.


Mar 31, 2013

1. Contingent liability on partly paid debentures and shares. NIL NIL

2. Claim of material amount on account of disputes raised by a customer against the Company which has not been accepted and has been referred to the Arbitrator. The matter is under litigation and the liability, if any, cannot be ascertained and hence not provided in the accounts.

3. There are no doubtfull debts or doubtful advances during the year (Previous year, Rs. NIL)

4. As of 31st March,2013 the Company had no oustanding dues to small scale industrial undertakings for sum of of Rs.1 lac or more for more than 30 days.

5. No loan or advances given to employees during year ( Previous year Rs.NIL).

6. Confirmations for debit and credit balances have been received.


Mar 31, 2012

As at As at 31.03.2012 31.03.2011 Rupees Rupees

1. Estimated amount of capital contracts remaining to be executed and not provided for. NIL NIL

2. Contingent liability on partly paid debentures and shares. NIL NIL

3. Guarantees given by a bank. 24,500 224,000

4. (a) Appeals filed by the Income Tax Department against appellate decisions favourable to the Company involving tax amount to 1,285,940 1,285,940

(b) Necessary provision in respect of above liabilities, including interest if any, will be made in the accounts on final outcome of appeals.

5. Payment to Auditors Audit fees 60,000 40,000

6. Claim of material amount on account of disputes raised by a customer against the Company which has not been accepted and has been referred to the Arbitrator. The matter is under litigation and the liability, if any, cannot be ascertained and hence not provided in the accounts.

7. There are no doubtfull debts or doubtful advances during the year (Previous year, Rs. NIL)

8. As of 31st March, 2012 the Company had no outstanding dues to small scale industrial undertakings for sum of of Rs.1 lac or more for more than 30 days.

9. No loan or advances given to employees during year (Previous year Rs. NIL).

10. Confirmation for debit and credit balances have been received from most of the parties.

11. (a) Managerial Remuneration u/s 198 of the Companies Act, 1956

b) The computation of net profit under Section 198 of the Companies Act, 1956 has not been given since, due to the inadequacy of net profit as per section 309(5), no commission is payable for the year ended 31st March, 2012.


Mar 31, 2010

1. Claim of material amount on account of disputes raised by a customer against the Company which has not been accepted and has been referred to the Arbitrator. The matter is under litigation and the liability, if any, cannot be ascertained and hence not provided in the accounts.

2. No provision has been made in respect of doubtful debts amounting to Rs. 61,322/-(Previous year Rs.50,713/-). and doubtful advances amounting to Rs.15,516 /- ( Previous year Rs. 10,000/-).

3. As of 31st March,2010 the Company had no oustanding dues to small scale industrial undertakings for sum of Rs.1 lac or more for more than 30 days.

4. Advances recoverable include loan to employees of Rs.8,064/- ( Previous year Rs.25,200/-).

Maximum balance outstanding during the year is Rs.25,200/- (Previous year Rs.33,000/-).

5. Confirmation for debit and credit balances have not been received from several parties.

6. DEFERRED TAX ASSETS

Note : Pursuant to Accounting Standard (AS) 22, during the year deferred tax liabilities of Rs.1,02,570/- has been debited to Profit and Loss account and credited to Deferred Tax Assets.

7. TRANSACTION WITH RELATED PARTY:

a) "Including additional provision of Rs. 1,11,100/- on account of increase in Gratuity provision ceiling from Rs.3.50 lacs to Rs.10.00 lacs .

b) The computation of net profit under Section 198 of the Companies Act, 1956 has not been given since, due to the - inadequacy of net profit as per section 309(5), no commission is payable for the year ended 31st March, 2010.

8. Information regarding goods manufactured :

NOTE:

1. # Quantitative information regarding Rawmaterials, Components & Stores cannot be given as the items are numerous and cannot be classified into suitable categories.

2. @ 5 Nos. Cranes Purchased and sold during the year.

10. Earning Per Share (EPS):

11. Expenditure in Foreign Currency on account of: Others

12. Earnings in Foreign Currency

13. There is no remittance of foreign currency in respect of dividend during the year.

14. Figures for the previous year have been regrouped and re-classified to conform with those of the current year, wherever necessary.

 
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