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Notes to Accounts of Mega Fin (India) Ltd.

Mar 31, 2012

A) Terms/rights attached to shares Preference Shares

The authorised capital structure of the company includes 9% Redeemable Cumulative Preference shares having a par value of Rs. 100/-per share. Holder of preference shares have preference in right to receive dividend in case company proposes to distribute and pay the same. Maximum dividend which can be distributed and paid to preference shareholders is 9% of the paid up amount of the preference share capital. Holder of preference share is not entitled to vote unlike holder of equity share.

In the event of liquidation of the company, the holders of preference shares will have priority as compared to equity shareholders in distribution of assets of the company. The distribution will be in proportion to the number of preference shares held by the shareholders.

Equity Shares

The Company has only one class of equity shares having a par value of 110/-per share. Each holder of equity shares is entitled to vote per share. The Company declares and pay dividends in indian rupees. The dividend proposed by the Board of Director is subject to the approval of the shareholders in the ensuing Annual General Meeting.

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

1.1 During the year 1997-98, the Company has received Wealth Tax refund of Rs.10,83,250/- of M. G. Mittal & Co. and the same amount has been shown as payable to M/s. M. G. Mittal & Company under the head sundry creditors.

In case of Quoted Equity Instruments, the Company has not transferred following shares in its own name and also the Company is not holding valid transfer deed for the same shares. Losses because of non receipt of dividend/bonus shares/right shares or non receipt of shares due to spin-off / de-merger on those shares are unascertainable. However, the company is pursuing to get valid transfer deed from respective transferors or with Registrar of Companies as per section 108 (1-D) of Companies Act, 1956.

2.1 Loans Given include

a) 1,78,82,349/- (Previous year Rs.1,79,82,349/-) due from companies in which directors are interested as directors/members.

b) Dues from ex-officer of the Company Rs.1,77,133/- (Previous Year Rs.1,77,133/-)

2.2 Loans Given (Gross) of Rs.178.82 lacs (Previous Year: Rs. 179.82 Lacs) and which are outstanding for a long period and there are no repayments/interest recovery. The management is of the opinion that the aforesaid amounts are good and recoverable & hence no provision for bad debts/ write off has been made except the provision made in the past as required by NBFC Prudential Norms (Reserve Bank) Directions, 1998 when the Company was registered as a NBFC with RBI.

2.3 Loans Given (Gross) of Rs.44.75 lacs (Previous Year: Rs. 44.75 Lacs) and which are outstanding for a long period and there are no repayments/interest recovery. The management is of the opinion that the aforesaid amounts are doubtful & hence provision for Rs.37.81 Lacs only (Previous Year: Rs. 37.81 Lacs) towards bad debts/ write off has been made.

3.1 Sundry debtors includes a sum of Rs.1,52,21,204/- for which the company has filed cases under section 138 of the Negotiable Instrument Act, 1882. The Company has made provision as per guidelines issued by the Reserve Bank of India applicable to all registered Non-Banking Finance Companies in respect of all the sundry debtors on which the Company has filed the cases under section 138 of the Negotiable Instrument Act, 1882. However, in the opinion of the company the said amounts are considered to be good and recoverable.

3.2 During the year 1994-95, the Company had given on lease plant and machinery worth Rs. 41,34,000/- to one of the lessees. During the year 1997-98 , the said plant and machinery have been repossessed by the Company and sold to other party at Rs. 23,00,000/-. As on 31.03.2012, the amount outstanding is Rs. 12,50,012/- (P.Y. Rs. 12,50,012/-)and the same has been shown under the head Sundry Debtors.

4.1 Short Term Loans and Advances of Rs.9,731/- (Previous year 17,100/-) due from companies in which directors are interested as directors/members.


Mar 31, 2011

1) Contingent Liability not provided for

(a) Rs. 14,91,000/- in respect 42600 partly paid-up shares of Dhanalakshmi Bank Ltd. (Previous year Rs. 14,91,000/-)

(b) In respect of demand raised Rs.55,043/= by Income Tax Department for A.Y.2002-2003 for which rectification application is made.

2) Loans & Advances include

a) Rs. 3,44,287/- (Previous year Rs. 3,44,287/-) due from companies in which directors are interested as directors / members.

b) Dues from ex-officer of the Company Rs. 1,77,133/- (Rs,-1,77,133/-) Maximum Balance outstanding at any time during the year Rs. 1,77,133/- (1,77,133/-)

3) Loans &Advance (Gross) of Rs, 145.31 lacs and sundry debtors (Gross) of Rs. -188.86 lacs which are outstanding for a long period and there are no repayments/ interest recovery. The management is of the opinion that the aforesaid amounts are good and recoverable & hence no provision for bad debts/ write off has been made except the provision made in the past as required by NBFC Prudential Norms (Reserve Bank) Directions, 1998 when the Company was registered as a NBFC with RBI.

4) Bank balances with bank in current accounts includes Rs. 406.77 in The National Co. op. Bank Ltd. and Rs. 1,875.00 in Alibaug Co. op. Bank. Maximum balance outstanding at anytime during the year with The National Co. op .Bank Ltd. was Rs. 406.77 (Previous year Rs. 406.77) and with Airbau Co-op. Bank was Rs. 1,875.00 (Previous year Rs. 1,989.00)

5) a) The balances of Loans & Advances, deposits, sundry debtors are subject to confirmation. During the year company has not send confirmation to lessees as to physical existence and working condition of lease assets.

b) Due to non availability of confirmation from lessees to whom assets are given on lease since last many years and in respect of other fixed assets, whose useful life has expired and book value is Rs. Nil,

6) The Company has not transferred following shares in its own name and also the Company is not holding valid transfer deed for the same shares. Losses because of non receipt of dividend/bonus shares/right shares or non receipt of shares due to spin-off/ de-merger on those shares are unascertainable. However, the company is pursuing to get valid transfer deed from respective transferors or with Registrar of Companies as per section 108 (1-D) of Companies Act, 1956.

7) The Company has not complied with Sec. 383A of Companies Act, 1956 as the Company have no whole time Company Secretary and Sec.269 of Companies Act, 1956 as the Company have no Managing Director.

8) The Management believes that the company is a going concern and will continue to be so in the foreseeable future, notwithstanding the fact that the company has eroded its net worth and its activity is standstill. Considering the steps initiated by the company for recovery of its dues from its clients, including legal recourse, the company is confident that the outstanding will be reduced in dues course of time and the Company will be able to ecommerce business activities

9) In the opinion of the Board of Directors, the Current Assets, Loans and Advances have the value on realisation in an ordinary course of business not less than the amount at which they are stated in the Balance Sheet and Provision for all known liabilities are adequate.

10) No provision is considered necessary for sales tax on the transfer of right to use any goods for any purpose under various state sales tax laws. The demands, if held payable, are recoverable from the concerned lessees, in accordance with the respective lease agreements.

11) Sundry debtors includes a sum of Rs. 1, 52, 21,204/- for which the company has filed cases under section 138 of the Negotiable Instrument Act, 1882. The Company has made provision as per guidelines issued by the Reserve Bank of India applicable to all registered Non-Banking Finance Companies in respect of all the sundry debtors on which the Company has filed the cases under section 138 of the Negotiable Instrument Act, 1882. However, in the opinion of the company the said amounts are considered to be good and recoverable.

12) During the year 1994-95 the Company had given on lease plant and machinery worth Rs.41, 34,000/- to one of the lessees. During the year 1997-98 , the said plant and machinery have been repossessed by the Company and sold to other party at Rs. 23,00,000/-. As on 31.03.2011, the amount outstanding is Rs. 12, 50,012/- and the same has been shown under the head Sundry Debtors.

13) During the year 1997-98, the Company has received Wealth Tax refund of Rs. 10,83,250/- of M. G. Mittal & Co. and the same amount has been shown as payable to M/s. M. G. Mittal & Company under the head sundry creditors.

14) Additional information pursuant to the provisions of paragraph 3 of Part II of Schedule VI of the Companies Act, 1956.

i) Expenditure under Foreign Currency on account of travelling Rs. Nil (Previous year Rs. Nil).

ii) Other information pursuant to the-provisions of paragraph 4, 4A, 4C and 4D of Part II to schedule VI of the Companies Act, 1956 is not applicable.

15). As the Company has no Managing Director the calculation of Net profit u/s.198 and349 of the Companies act, 1956 has not been given.

16). A) Related party disclosures

i. Related Party relationships:

Subsidiary Company

Mega Capital Broking Pvt. Ltd

Other Related Party

Arshiya International Ltd

Note :

1. The related party relationship have been determined by the management on the basis of the requirements of the Accounting Standard AS-18 'Related Party Disclosures' issued by the ICAI and the same have been relied upon by the auditors.

B) Disclosure of Transactions with related party

Transaction with the subsidiary company Particulars of transaction Loan given :

Opening Balance Rs. 8,050/- Loan Given Rs.5,100/-

Less: Receipt(*) Rs.6,050/--

Closing Balance Rs.7,100/- (*)Dividend received in respect of shares held by subsidiary company

17) As there is no virtual certainty of future taxable income and in view of losses during the year, no provision for deferred tax liability as required by AS-22 has been considered.

18) In view of the no business activity of the subsidiary Company, separate consolidated financial statement are not prepared as required by AS 21 issued by ICAI.

19) In view of the benefits available as per Income Tax Act 1961 and the carried forward business losses no income tax is payable, hence no provision for income tax has been made.

20) The All Fixed Assets has been sold as a scrap in current year at Rs.25, 775/-

21) Previous year's figures have been re-grouped, rearranged, reworked & reclassified Wherever necessary.

As per our attached report of even date

1. The financial year of the Subsidiary Companies ended on 31.03.2011

2. Date from which they became subsidiary companies 23.02.1996

3. a) Number of shares held by Mega Fin (India) Limited with its nominees in the subsidiaries at the end of the 2,71,000 Equity Shares financial year of the subsidiary companies. of Rs. 10/- each.

b) Extent of interest of holding company at the end of 99.99% the financial year of the subsidiary companies

22. The net aggregate amount of profit/(loss) of the subsi- diary company so far as it concerns the members of the holding Company and is not dealt with in the holding Company's accounts

i) For the financial year ended 31st March, 2011 (Rs.6,448/-) of the subsidiary company.

ii) For the previous financial years of the subsidiary companies since it became a subsidiary company. (Rs. 8, 38,276/-)

23. The net aggregate amount of profit/(loss) of the subsidiary company so far as it concerns the members of the holding Company and is dealt with in the holding Company's accounts.

i) For the financial year ended 31st March, 2011 NIL of the subsidiary company.

ii) For the previous financial years of the Subsidiary Company since it became a Subsidiary Company. NIL

24. Material changed if any between the end of financial year of the NIL Subsidiary Company and that of the Holding Company.


Mar 31, 2010

1) Contingent Liability not provided for

(a) Rs. 14,91,000/- in respect 42600 partly paid-up shares of Dhanalakshmi Bank Ltd. (Previous year Rs. 14,91,000/-)

(b) In respect of demand raised Rs.55,043/= by Income Tax Department for A. Y.2002-2003 for which rectification application is made.

2) Loans & Advances include

a) Rs. 3,44,287/- (Previous year Rs. 3,44,287/-) due from companies in which directors are interested as directors / members.

b) Dues from ex-officer of the Company Rs. 1,77,133/- (Rs. 1,77,133/-) Maximum balance outstanding at any time during the year Rs. 1,77,133/- (1,77,133/-)

3) Loans &Advance (Gross) of Rs. 145.31 lacs and sundry debtors (Gross) of Rs. 188.86 lacs which are outstanding for a long period and there are no repayments/ interest recovery. The management is of the opinion that the aforesaid amounts are good and recoverable & hence no provision for bad debts/ write off has been made except the provision made in the past as required by NBFC Prudential Norms (Reserve Bank) Directions, 1998 when the Company was registered as a NBFC with RBI.

4) Bank balances with bank in current accounts includes Rs. 406.77 in The National Co. op.Bank Ltd. and Rs. 1,875.00 in Alibaug Co. op. Bank. Maximum balance outstanding at anytime during the year with The National Co. op .Bank Ltd. was Rs. 406.77 (Previous year Rs. 406.77) and with Alibaug Co.op. Bank was Rs. 1,875.00 (Previous year Rs. 1,989.00)

5) a) The balances of Loans & Advances, deposits, sundry debtors are subject to confirmation. During the year company has not send confirmation to lessees as to physical existence and working condition of lease assets.

b) Due to non availability of confirmation from lessees to whom assets are given on lease since last many years and in respect of other fixed assets, whose useful life has expired and book value is Rs.Nil, the management has written off the lease assets in the next financial year and has also scrap the other fixed assets in next financial year.

6) The Company has not transferred following shares in its own name and also the Company is not holding valid transfer deed for the same shares. Losses because of non receipt of dividend/bonus shares/right shares or non receipt of shares due to spin-off / de-merger on those shares are unascertainable. However, the company is pursuing to get valid transfer deed from respective transferors or with Registrar of Companies as per section 108 (1-D) of Companies Act, 1956.

8) The Company has not complied with Sec. 3 83A of Companies Act, 1956 as the Company have no whole time Company Secretary and Sec.269 of Companies Act, 1956 as the Company have no Managing Director.

9) The Management believes that the company is a going concern and will continue to be so in the foreseeable future, notwithstanding the fact that the company has eroded its net worth and its activity is standstill. Considering the steps initiated by the company for recovery of its dues from its clients, including legal recourse, the company is confident that the outstanding will be reduced in dues course of time and the Company will be able to recommence business activities

10) In the opinion of the Board of Directors, the Current Assets, Loans and Advances have the value on realisation in an ordinary course of business not less than the amount at which they are stated in the Balance Sheet and Provision for all known liabilities are adequate.

11) No provision is considered necessary for sales tax on the transfer of right to use any goods for any purpose under various state sales tax laws. The demands, if held payable, are recoverable from the concerned lessees, in accordance with the respective lease agreements.

12) Sundry debtors includes a sum of Rs. 1,52,21,204/- for which the company has filed cases under section 138 of the Negotiable Instrument Act, 1882. The Company has made provision as per guidelines issued by the Reserve Bank of India applicable to all registered Non-Banking Finance Companies in respect of all the sundry debtors on which the Company has filed the cases under section 138 of the Negotiable Instrument Act, 1882. However, in the opinion of the company the said amounts are considered to be good and recoverable.

13) During the year 1994-95 the Company had given on lease plant and machinery worth Rs.41, 34,000/- to one of the lessees. During the year 1997-98 , the said plant and machinery have been repossessed by the Company and sold to other party at Rs. 23,00,000/-. As on 31.03.2010, the amount outstanding is Rs. 12, 50,012/- and the same has been shown under the head Sundry Debtors.

14) During the year 1997-98, the Company has received Wealth Tax refund of Rs. 10,83,250/- of M. G. Mittal & Co. and the same amount has been shown as payable to M/s. M. G. Mittal & Company under the head sundry creditors.

15) Additional information pursuant to the provisions of paragraph 3 of Part II of Schedule VI of the Companies Act, 1956.

i) Expenditure under Foreign Currency on account of travelling Rs. Nil (Previous year Rs. Nil).

ii) Other information pursuant to the provisions of paragraph 4, 4A, 4C and 4D of Part II to schedule VI of the Companies Act, 1956 is not applicable.

16) As the Company has no Managing Director the calculation of Net profit u/s. 198 and349 of the Companies act, 1956 has not been given.

17) In view of non availability of balance confirmation and statement of account from Union Bank of India - Ahmedabad this balances are subject to confirmation and reconciliation and adjustment / entries to these account would be made on receipt of Statement of account and confirmation and completion of reconciliation .We have been Informed that as the accounts are not at all operative , there will not be any material Impact on financial statement.

18) A) Related party disclosures

i. Related Party relationships:

Subsidiary Company

Mega Capital Broking Pvt. Ltd

Other Related Party

Arshiya International Ltd

Note:

1. The related party relationship have been determined by the management on the basis of the requirements of the Accounting Standard AS-18 Related Party Disclosures issued by the ICAI and the same have been relied upon by the auditors.

B) Disclosure of Transactions with related party

20) AS-28 issued by the ICAI is applicable to the Company with effect from accounting Period commencing on or after 01/04/2004. Therefore, during the financial year 2004-05, the Company had identified its assets usage carrying values had been impaired and having regard to the principles of AS-28, the Company had made a provision of Rs. 18,07,400/- in respect of impairment of office equipments, electric installation and furniture & fixtures, as in the opinion of the management the net realisable value of all these assets were insignificant compared to cost price at which the same was carried forward.

19) As there is no virtual certainty of future taxable income and in view of losses during the year, no provision for deferred tax liability as required by AS-22 has been considered.

20) In view of the no business activity of the subsidiary Company, separate consolidated financial statement are not prepared as required by AS-21 issued by ICAI.

21) In view of the benefits available as per Income Tax Act 1961 and the carried forward business losses no income tax is payable, hence no provision for income tax has been made.

22) Previous years figures have been re-grouped, rearranged, reworked & reclassified wherever necessary.

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