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Notes to Accounts of Master Trust Ltd.

Mar 31, 2015

1. Corporate Information

Master Trust Limited ('the Company') is a public limited company domiciled in India and incorporated under the provision of the Companies Act, 1956. The Company was registered as a Non-Deposit Accepting Non Banking Financial Company ('NBFC-ND') with the Reserve Bank of India ('RBI'). Its shares are listed on Bombay Stock Exchange (BSE) in India.

The company is mainly in the business of lending, sales/purchases of Securities and lands.

Note 2 Contingent liabilities

(a) The Punjab State Industrial Development Corporation Limited (PSIDC) had contributed Rs.8.85 Million in the equity share capital of Prime Industries Ltd @ Rs.10/- per share, as Direct Equity Participation in 1993. The Company as an associate promoter of Prime Industries Ltd. , pledged 569300 shares (Previous year 569300 shares) of Prime Industries Ltd of Rs.10/- each amounting to Rs.5.69 Million (Previous Year Rs.5.69 Million) to PSIDC along with irrevocable power of attorney. The Company had also subscribed to the undertaking for buy back of the shares subscribed by PSIDC as referred above. As per the terms of undertaking for buy back of the shares, the promoters were to buy the said shares at the face value along with interest applicable to term financing before the expiring of seven years from the date of commencement of commercial production i.e.4th April, 1994. As per the terms of the above referred undertaking, in case the promoters/associates did not buy back the shares subscribed by PSIDC, then the PSIDC was entitled to sell the shares subscribed by it and also recovers the loss if any by sale of the above referred shares pledged to the PSIDC. The PSIDC had announced OTS Policy for equity disinvestment. The promoters / associates have applied for buy back of shares under OTS policy, subject to their rights under the law to adjudicate upon the amount due under the buy back agreement. However the government of Punjab has amended the one time settlement scheme whereby the profit making companies are not eligible for the OTS scheme as per industrial policy 2003. The PSIDC vide letter dated 29 April, 2009 had illegally withdrawn the OTS in case of Prime Industries Limited. The Government of Punjab has Further notified a new one time settlement scheme (OTS) vide notification number 15/03/09-AS-6/400 Dated 2ndMarch, 2009. The promoters/associates being eligible even under the new OTS policy also applied for buy back of shares. The request of promoters/associates was not accepted by PSIDC despite the fact that a sum of Rs.25.10 Million (previous year Rs.25.10 Million) shown as loans and advances recoverable in cash and/or kind has already been paid as per the amount demanded by the PSIDC in this respect. PSIDC has filled a case for further recovery of Rs.35.13 Million before Honorable Debts Recovery Tribunal.

Rejection of the PSIDC was challenged by the promoters/associates In the High Court of Punjab and Haryana at Chandigarh in Civil Writ Petiton No. 6436 of 2011 and The Hon'ble Hight Court has decided the case in favour of promoters/associates vide order dated 10th October, 2014 and has held that the rejection order dated 3rd December, 2010 issued by PSIDC is quashed and the Company is entitled to the benefit of new OTS Policy-2009 and if the amount paid already in excess, the amount held in excess is directed to be repaid with interest @ 12 % p.a.

However consequent to correspondence and discussions between the PSIDC and the promoters/associates of Prime Industries Ltd, in order to avoid long drawn litigation the promoters/associates have agreed that they will not claim the refund of excess amount paid already with interest @ 12 % p.a as per the order of the Honorable Punjab & Haryana High Court and the Board of Directors of PSIDC in its meeting held on 10th February, 2015 has decided that the amount already paid shall be treated as full and final payment of the dues. Further, the parties have arrived upon a Mutual Settlement before the Honorable Punjab & Haryana High Court vide its Order dated 19th May, 2015.

As per the terms of Mutual Settlement, the promoters of Prime Industries Ltd including Master Trust Ltd stand absolved of all their liabilities/obligations under the direct subscription agreement dated 14th September,1993 and undertaking for buy back of shares dated 14 September,1993 in respect of direct subscription of equity shares of Prime Industries Ltd. As per the terms of the mutual settlement, PSIDC has agreed to withdraw its OA No. 164/2009 filed before Debts Recovery Tribunal, Chandigarh. The shares pledged with PSIDC have also been agreed to be released and the shares subscribed by PSIDC shall be transferred as per the terms of the settlement/compromise as per the order of the Honorable Punjab & Haryana High Court.

(b) The Company has given Corporate Guarantee to Banks for securing the Bank Guarantees limits of Rs.720.00 Million (As at 31st March, 2014: Rs. 620.00 Million) on behalf of Master Capital Services Ltd. a wholly owned subsidiary company and Rs.350.00 Million (As at 31st March, 2014: Rs. 400.00 Million) on behalf of Master Commodity Services Ltd a subsidiary company.

(c) As per an Ex-Parte Ad- Interim Order number WTM/RKA/ISD/162/2014 dated 19th December, 2014 by SEBI in the matter of First Financial Services Limited, Master Trust Limited amongst others, has been restrained from accessing the securities market and buying, selling or dealing in securities, either directly or indirectly, in any manner, till further directions. The Order has affected one of its activity i.e. trading/investment in securities till further directions.

The order is being contested by the company and is sub- judice. In the view of the management and as per the legal advice, no liability is likely to arise. Even, the amount of liability, if any, is indeterminate. Accordingly, no liability has been provided for.

Note 3

Disclosures, relating to amounts unpaid as at the year end together with interest required under the Micro, Small and Medium Enterprises Development Act, 2006 have been given to the extent company has received intimation from "Suppliers" regarding their status under the said Act.

Note 24

As per Accounting Standard (AS) 17 on "Segment Reporting", segment information has been provided under the Notes to Consolidated Financial Statements.

Note 4

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






Mar 31, 2014

Note 1 Contingent liabilities

(a) "The Punjab State Industrial Development Corporation Limited (PSIDC) had contributed Rs.8.85 mn in the equity share capital of Prime Industries Ltd @ Rs.10/- per share, as Direct Equity Participation in 1993. The Company as an associate promoter of Prime Industries Ltd. ,pledged 569300 shares (Previous year 569300 shares) of Prime Industries Ltd of Rs.10/- each amounting to Rs.5.69 mn (Previous Year Rs.5.69 mn) to PSIDC along with irrevocable power of attorney. The Company has also subscribed to the undertaking for buy back of the shares subscribed by PSIDC as referred above. As per the terms of undertaking for buy back of the shares, the promoters are to buy the said shares at the face value along with interest applicable to terms financing before the expiring of seven years from the date of commencement of commercial production i.e.4th April, 1994. As per the term of the above referred undertaking, in case the promoters/associates do not buy back the shares subscribed by PSIDC, then the PSIDC is entitled to sell the shares subscribed by it and also recovers the loss if any by sale of the above referred shares pledged to the PSIDC. The PSIDC had announced OTS Policy for equity disinvestment. The promoters / associates have applied for buy back of shares under OTS policy, subject to their rights under the law to adjudicate upon the amount due under the buy back agreement However the government of Punjab has amended the one time settlement scheme whereby the profit making companies are not eligible for the OTS scheme as per industrial policy 2003. The PSIDC vide letter dated 29th April, 2009 has illegally withdrawn the OTS in case of Prime Industries Limited and the matter is sub judice before Honorable Punjab & Haryana High Court. The Government of Punjab has Further notified a new one time settlement scheme (OTS) vide notification number 15/03/09-AS-6/400 Dated 2nd March, 2009. The promoters/associates being eligible even under the new OTS policy also, have apply for buy back of shares. The request of promoters/associates has not been accepted by PSIDC and the matter is sub judice before Honorable Punjab & Haryana High Court, a sum of Rs.25.10 mn (previous year Rs.25.10 mn) shown as loans and advances to others has been paid as per the amount demanded by the PSIDC in this respect. However PSIDC has filled a case for further recovery of Rs.35.13 mn before Honorable Debts Recovery Tribunal."

(b) The Company has given Corporate Guarantee to Banks for securing the Bank Guarantees limits of Rs.620.00 mn (As at 31st March, 2013: Rs. 620.00 mn) on behalf of Master Capital Services Ltd. a wholly owned subsidiary company and Rs.400.00 mn (As at 31st March, 2013: Rs.500.00mn) on behalf of Master Commodity Services Ltd a subsidiary company.

Note 2

Disclosures, relating to amounts unpaid as at the year end together with interest required under the Micro, Small and Medium Enterprises Development Act, 2006 have been given to the extent company has received intimation from "Suppliers" regarding their status under the said Act.

Note 3

As per Accounting Standard (AS) 17 on "Segment Reporting", segment information has been provided under the Notes to Consolidated Financial Statements.

Note 4

The Ministry of Corporates Affairs, Government of India, vide General Circular No 2 and 3 dated 8th February, 2011 and 21st February 2011 respectively has granted a general exemption from compliance with section 212 of the Companies Act, 1956, subject to fulfillment of conditions stipilated in the circular. The Company has satisfied the conditions stipilated in the circular and hence is entitled to the exemption. Necessary information relating to the subsidiaries has been included in the Consolidated Financial Statements.

Note 5 Related Party Disclosures

As required by AS-18, Related Party Disclosures, are given below:

Subsidiaries

Master Capital Services Ltd.

Master Infrastructure & Real Estate Developers Ltd.

Master Insurance Brokers Ltd

Master Commodity Services Ltd

Master Portfolio Services Ltd.

H.A. Share & Stock Brokers Ltd.

Associates/Enterprises owned or

significantly influenced by the

key Management Persons or

their Relatives

Prime Industries Ltd.

Master Share & Stock Brokers Ltd.

H.K Arora Real Estate Service Ltd

Sanawar Investments

PHDA Financial Services (P) Ltd.

Saintco India (P) Ltd.

Singhania Properties.

Partnership Firms

Key Management Personnel and their Relatives

Mr. Harjeet Singh Arora

Mr. R K Singhania

Mr. G S Chawla

Mr. Sanjay Sood

Mr. Pavan Chhabra

Mrs. Harneesh Kaur Arora

Mr. Ashwani Kumar

Mr. Anil Kumar Bhatiya

Mr. Sudhir Kumar

Mrs. Parveen Singhania

Mr. Puneet Singhania

Mr. Chirag Singhania

Mrs. Palka A Chopra

Mr. Jashanjyot Singh

Note 6

The Company''s domestic subsidiary Master Capital Services Limited has declared dividend of Rs. 5.90 mn (Previous Year Rs. 5.90 mn) is receivable by the Company in respect of which dividend distribution tax would be paid by the subsidiary. In terms of provision of sub section 1A of section 115 O of the Income Tax Act, 1961 dividend distribution tax is payable by the company on the amount being excess of dividend proposed by the company over the dividend receivable by the company from its subsidiary.

Note 7

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

Notes:

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

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

3. 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.


Mar 31, 2013

Note 1 Contingent liabilities

(a) The Punjab State Industrial Development Corporation Limited (PSIDC) had contributed Rs.8.85 mn in the equity share capital of Prime Industries Ltd @ Rs.10/- per share, as Direct Equity Participation in 1993. The Company as an associate promoter of Prime Industries Ltd., pledged 569300 shares (Previous year 569300 shares) of Prime Industries Ltd of Rs.10/- each amounting to Rs.5.69 mn (Previous Year Rs.5.69 mn) to PSIDC along with irrevocable power of attorney. The Company has also subscribed to the undertaking for buy back of the shares subscribed by PSIDC as referred above. As per the terms of undertaking for buy back of the shares, the promoters are to buy the said shares at the face value along with interest applicable to terms financing before the expiring of seven years from the date of commencement of commercial production i.e.4th April, 1994. As per the term of the above referred undertaking, in case the promoters/associates do not buy back the shares subscribed by PSIDC, then the PSIDC is entitled to sell the shares subscribed by it and also recovers the loss if any by sale of the above referred shares pledged to the PSIDC. The PSIDC had announced OTS Policy for equity disinvestment. The promoters / associates have applied for buy back of shares under OTS policy, subject to their rights under the law to adjudicate upon the amount due under the buy back agreement However the government of Punjab has amended the one time settlement scheme whereby the profit making companies are not eligible for the OTS scheme as per industrial policy 2003. The PSIDC vide letter dated 29th April, 2009 has illegally withdrawn the OTS in case of Prime Industries Limited and the matter is sub judice before Honorable Punjab & Haryana High Court. The Government of Punjab has Further notified a new one time settlement scheme (OTS) vide notification number 15/03/09-AS-6/400 Dated 2nd March, 2009. The promoters/associates being eligible even under the new OTS policy also, have apply for buy back of shares. The request of promoters/associates has not been accepted by PSIDC and the matter is sub judice before Honorable Punjab & Haryana High Court, a sum of Rs.25.10 mn (previous year Rs.25.10 mn) shown as loans and advances recoverable in cash and/or kind has been paid as per the amount demanded by the PSIDC in this respect. However PSIDC has filled a case for further recovery of Rs.35.13 mn before Honorable Debts Recovery Tribunal.

(b) Bank Guarantee of US$ Nil (previous year US$ 0.05 mn) in favor of American Express Travel Related Services Company Inc. U.S.A. for traveller cheques stock limit.

(c) The Company has given Corporate Guarantee to Banks for securing the Bank Guarantees limits of Rs.620.00 mn (As at 31st March, 2012: Rs.760.00 mn) on behalf of Master Capital Services Ltd. a wholly owned subsidiary company and Rs.500.00 mn (As at 31st March, 2012: Rs.410.00mn) on behalf of Master Commodity Services Ltd a subsidiary company.

Note 2

Disclosures, relating to amounts unpaid as at the year end together with interest required under the Micro, Small and Medium Enterprises Development Act, 2006 have been given to the extent company has received intimation from "Suppliers" regarding their status under the said Act.

Note 3

As per Accounting Standard (AS) 17 on "Segment Reporting", segment information has been provided under the Notes to Consolidated Financial Statements.

Note 4

The Ministry of Corporate Affairs, Government of India, vide General Circular No 2 and 3 dated 8th February, 2011 and 21st February, 2011 respectively has granted a general exemption from compliance with section 212 of the Companies Act, 1956, subject to fulfillment of conditions stipulated in the circular. The Company has satisfied the conditions stipulated in the circular and hence is entitled to the exemption. Necessary information relating to the subsidiaries has been included in the Consolidated Financial Statements.

Notes:

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

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

3. 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 5

The Company''s domestic subsidiary Master Capital Services Limited has declared dividend of Rs.5.90 mn (Previous Year Rs.8.85 mn) is receivable by the Company in respect of which dividend distribution tax would be paid by the subsidiary. In terms of provision of sub section 1A of section 115 O of the Income Tax Act, 1961 dividend distribution tax is payable by the company on the amount being excess of dividend proposed by the company over the dividend receivable by the company from its subsidiary.

Note 6

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


Mar 31, 2012

1.1 The Company has only one class of equity shares having a par value of Rs. 10 per share. Each shareholder is eligible for one vote per share.

1.2 Calls in Arrears by others Nil ( As at 31 March, 2011 Rs. 560,250)

1.3 The details of shareholders holding more than 5% shares:

1.4 In terms of the approval of the Board of Directors and Shareholders of the Company and as per statutory provisions including SEBI (Issue of Capital and Disclosure Requirements), Regulation 2009, the Company on August 28 , 2010 had issued and allotted 47,75,000 Convertible Warrants on preferential basis. Each warrant provided the holder with the option to subscribe to one fully paid-up equity share of the Company for every warrant at a price of Rs. 68/- per warrant (including a premium of Rs. 58/- per warrant) within 18 months from the date of allotment.

The Company has converted 41,35,000 Convertible Warrants into Equity Shares on 14 February, 2012 (As at 31 March, 2011 640000 Convertible Warrants into Equity Shares on 28 March, 2011)of Rs. 10/- each.

2.1 Loans from banks are secured against pledging of FDRs

2.2 Secured Other loans and advances are secured against proceeds from sale of Units of Mutual Funds.

3.1 Unclaimed dividends do not include any amounts, due and outstanding, to be credited to Investor Education and Protection Fund.

* Deposit are pledged against overdraft facility

* Includes Gratuity amounting to Rs. 217,815 ( Year ended March 31, 2011 :212,359)

Note 4 Contingent Liabilities

(a) The Punjab State Industrial Development Corporation Limited {PSI DC) had contributed Rs. 8.85 mn in the equity share capital of Prime Industries Ltd @ Rs. 10/- per share, as Direct Equity Participation in 1993. The Company as an associate promoter of Prime Industries Ltd., pledged 569300 shares (Previous year 569300 shares) of Prime Industries Ltd of Rs. 10/- each amounting to Rs. 5.69 mn (Previous Year Rs. 5.69 mn) to PSIDC along with irrevocable power of attorney. The Company has also subscribed to the undertaking for buy back of the shares subscribed by PSIDC as referred above. As per the terms of undertaking for buy back of the shares, the promoters are to buy the said shares at the face value along with interest applicable to terms financing before the expiring of seven years from the date of commencement of commercial production i.e. 04.04.1994. As per the term of the above referred undertaking, in case the promoters/associates do not buy back the shares subscribed by PSIDC, then the PSIDC is entitled to sell the shares subscribed by it and also recovers the loss if any by sale of the above referred shares pledged to the PSIDC. The PSIDC had announced OTS Policy for equity disinvestment. The promoters / associates have applied for buy back of shares under OTS policy, subject to their rights under the law to adjudicate upon the amount due under the buy back agreement However the government of Punjab has amended the one time settlement scheme whereby the profit making companies are not eligible for the OTS scheme as per industrial policy 2003. The PSIDC vide letter dated 29th April 2009 has illegally withdrawn the OTS in case of Prime Industries Limited and the matter is sub judice before Honorable Punjab & Haryana High Court. The Government of Punjab has Further notified a new one time settlement scheme (OTS) vide notification number 15/03/09-AS-6/400 Dated 02.03.2009. The promoters/associates being eligible even under the new OTS policy also, have apply for buy back of shares. The request of promoters/associates has not been accepted by PSIDC and the matter is sub judice before Honorable Punjab & Haryana High Court, a sum of Rs. 25.10 mn (previous year Rs. 25.10 mn) shown as loans and advances has been paid as per the amount demanded by the PSIDC in this respect. However PSIDC has filled a case for further recovery of Rs. 35.13 mn before Honorable Debts Recovery Tribunal.

(b) Bank Guarantee of US$ 0.05 mn (previous year US$ 0.05 mn) in favour of American Express Travel Related Services Company Inc. U.S.A. for traveler cheques stock limit.

(c) The Company has given Corporate Guarantee to Banks for securing the Bank Guarantees limits of Rs. 760.00 mn (As at 31 March, 2011: Rs. 1000.00 mn) on behalf of Master Capital Services Ltd. a wholly owned subsidiary company and Rs. 410.00 mn (previous year 490.50mn) on behalf of Master Commodity Services Ltd a subsidiary company.

Note 5

Disclosures, relating to amounts unpaid as at the yearend together with interest required under the Micro, Small and Medium Enterprises Development Act, 2006 have been given to the extent company has received intimation from "Suppliers" regarding their status under the said Act.

Note 6

As per Accounting Standard (AS) 17 on "Segment Reporting", segment information has been provided under the Notes to Consolidated Financial Statements.

Note 7

The Ministry of Corporate Affairs, Government of India, vide General Circular No 2 and 3 dated 8th February, 2011 and 21st February 2011 respectively has granted a general exemption from compliance with section 212 of the Companies Act, 1956, subject to fulfillment of conditions stipulated in the circular. The Company has satisfied the conditions stipulated in the circular and hence is entitled to the exemption. Necessary information relating to the subsidiaries has been included in the Consolidated Financial Statements.

Notes:

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

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

3. 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 8

The Company's domestic subsidiary Master Capital Services Limited has declared dividend of Rs. 8.85 mn (Previous Year Rs. 6.12 mn) is receivable by the Company in respect of which dividend distribution tax would be paid by the subsidiary. In terms of provision of sub section 1A of section 115 O of the Income Tax Act, 1961 dividend distribution tax is payable by the company on the amount being excess of dividend proposed by the company over the dividend receivable by the company from its subsidiary.

Note 9

The Company has incurred foreign exchange out go is Rs. NIL (Previous Year Rs. 0.06 mn) during the year.

Note 10

The Revised Schedule VI has become effective from 1 April, 2011 for the preparation of financial statements. This has significantly impacted the disclosure and presentation made in the financial statements. Previous year's figures have been regrouped / reclassified wherever necessary to correspond with the current year's classification / disclosure.

 
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