Notes to Accounts of Sastasundar Ventures Ltd.

Mar 31, 2023

a. Terms / Rights attached to the equity shares

The Company has only one class of equity shares having par value of Rs. 10 per share. Each holder of equity share is entitled to one vote per share. The Company declares and pays dividends in Indian Rupees. The dividend proposed by the Board of Directors 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 be entitled to receive remaining 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.

* During the previous year, pursuant to Scheme of Amalgamation between Longrange Management Services Private Limited ("Transferor Company") and Luv Kush Projects Limited ("Transferee Company") under Section 233 of the Companies Act, 2013 and other relevant provisions and rules framed thereunder sanctioned by the Regional Director vide Order dated 30 December 2021, the shares held by Transferor Company stand transferred to Transferee Company with effect from 28 January, 2022 (Effective date of Scheme of Amalgamation).

As per records of the Company, including its register of shareholders / members and other declarations received from shareholders regarding beneficial interest, the above shareholding represents both legal and beneficial ownership of shares.

e. No shares have been reserved for issue under options and contracts/commitments for the same of shares/disinvestment as at the balance sheet date.

f. No shares have been allotted or has been bought back by the company during the period of 5 years, preceding the date as at which the balance sheet is prepared.

g. No Convertible securities have been issued by the company during the year.

h. No Calls are unpaid by any Director and officer of the company during the year.

Nature & Purpose of Reserves:

A. Capital Reserve

Reserve created on accounting of merger of subsidiaries.

B. Securities Premium

Securities premium reserve is used to record the premium on issue of shares. The reserve can be utilised only for limited purposes such as issuance of bonus shares in accordance with the provisions of the Companies Act, 2013.

C. Capital Redemption Reserve

This reserve has been created and held in books as per requirement of the companies Act.

D. Reserve under Section 45-IC of the Reserve Bank of India Act, 1934

As prescribed by Section 45 IC of Reserve Bank of India Act, 1934, no appropriation of any sum from the reserve fund shall be made by the Company except for the purpose as may be specified by RBI from time to time.

E. Retained Earnings

Retained earnings are the profits that the company has earned till date. Retained earnings includes re-measurement (loss)/ gain on defined benefit plans, net of taxes that will not be reclassified to statement of profit and loss. Retained earnings is a free reserve available to the company and eligible for distribution to shareholders.

21. Gratuity and other post-employment benefit plans

The Company has a defined employee benefit plan in the form of gratuity. The Gratuity plan provides a lump sum payment to vested employees at retirement, disability or termination of employment being an amount based on the respective employee''s last drawn salary and the number of years of employment with the Company.

The following tables summarise the components of net benefit expense recognised in the statement of profit or loss and the funded status and amounts recognised in the balance sheet for the respective plans:

Discount rate: The discount rate is based on the 5 years government bond yields as at the balance sheet date for the estimated term of the obligations.

Expected rate of return on plan assets: This is based on the expectation of the average long term rate of return expected on investments of the fund during the estimated term of the obligations.

Salary escalation rate: The estimates of future salary increases considered taking into account the inflation, seniority, promotion and other relevant factors.

The weighted average duration of the defined benefit obligation as at March 31, 2023 is 22 years (March 31, 2022: 20 years)

Description of risk exposure:

Valuations are performed on certain basic set of pre-determined assumptions and other regulatory frame work which may vary over time. Thus, the Company is exposed to various risks in providing the above gratuity benefit which are as follows:

Interest rate risk:

The plan exposes the company to the risk of fall in interest rates. A fall in interest rates will result in an increase in the ultimate cost of providing the above benefits and will thus result in an increase in the value of the liability (as shown in financial statements).

Liquidity risk:

This is the risk that the Company is not able to meet the short-term gratuity pay outs. This may arise due to non-availability of enough cash/cash equivalent to meet the liabilities or holding illiquid assets not being sold in time.

The present value of the defined benefit plan is calculated with the assumption of salary increase rate of plan participants in future. Deviation in the rate of increase of salary in future for plan participants from the rate of increase in salary used to determine the present value of obligation will have a bearing on the plan''s liability.

Regulatory risk:

Gratuity benefit is paid in accordance with the requirements of the Payment of Gratuity Act, 1972 (as amended from time to time). There is a risk of change in regulations requiring higher gratuity payouts.

Asset liability mismatching or market risk:

The duration of the liability is longer compared to duration of assets, exposing the Company to market risk for volatilities/ fall in interest rate.

Investment risk:

The probability or likelihood of occurrence of losses relating to the expected return on any particular investment.

22. Contingent liabilities, commitments and leasing arrangements 22.a. Contingent Liabilities

Claims against the Company not acknowledged as debts:		Rs. in Lakhs
Particulars	As at	As at
	March 31, 2023	March 31, 2022
Service Tax Demand	65.91	65.91
	65.91	65.91

The Company has been advised by its lawyers that none of the claims are tenable and is therefore contesting the same and hence has not been provided for in the books. The future cash flows on account of the above cannot be determined unless the judgements/decisions are received from the ultimate judicial forums. No reimbursements is expected to arise to the Company in respect of above cases.

b. Other contingent Liability:

(i) The Company has provided Corporate Guarantee amounting Rs. NIL (2021-22: Rs. 2,100.00 Lakhs) against credit facility availed from Union Bank of India by Sastasundar Healthbuddy Limited (a subsidiary company) for the purpose of purchase of Plant & Machinery and operations of the business. The amount of facility / guarantee actually availed by the subsidiary as on the balance sheet date amounts to Rs. NIL (2021-22: NIL). The Company has received no objection certificate for release of corporate guarantee of Rs. 2,100.00 Lakhs dated 30th April, 2022. from Union Bank of India.

(ii) The Company has provided Corporate Guarantee amounting Rs. 25.00 Lakhs (2021-22: 25.00 Lakhs) against credit card facility availed from HDFC Bank Limited by Sastasundar Healthbuddy Limited (a subsidiary company). The amount of facility / guarantee actually availed by the subsidiary as on the balance sheet date amounts to Rs. 0.49 lakhs (2021-22: Rs. 1.33 lakhs).

(iii) The Company has provided Corporate Guarantee amounting Rs. 10.00 Lakhs (2021-22: Rs. 10.00 Lakhs) against credit card facility availed from HDFC Bank Limited by Flipkart Health Limited (Formerly Sastasundar Marketplace Limited (an associate company). The amount of facility / guarantee actually availed by the subsidiary as on the balance sheet date amounts to Rs. NIL (2021-22: Rs. 1.51 lakhs).

(iv) The Company has provided Corporate Guarantee amounting Rs. 10.00 Lakhs (2021-22: Rs. 10.00 Lakhs) against credit card facility availed from HDFC Bank Limited by Retailer Shakti Supply Chain Private Limited (a step down subsidiary). The amount of facility / guarantee actually availed by the subsidiary as on the balance sheet date amounts to Rs. NIL (2021-22: Rs. 2.63 Lakhs).

The management assessed that cash and cash equivalents, trade receivables, trade payables, bank overdrafts and other current liabilities approximate their carrying amounts largely due to the short-term maturities of these instruments.

24.1. Valuation principles

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction in the principal (or most advantageous) market at the measurement date under current market conditions (i.e., an exit price), regardless of whether that price is directly observable or estimated using a valuation technique. In order to show how fair values have been derived, financial instruments are classified based on a hierarchy of valuation techniques, as explained in Note 24.3.

Investment in Unquoted mutual funds

The majority of equity instruments are actively traded on public stock exchanges with readily available active prices on a regular basis. Such instruments are classified as Level 1. Units held in funds are measured based on their published net asset value (NAV), taking into account redemption and/or other restrictions. Such instruments are generally Level 1. Equity instruments in non-listed entities included investment in private equity funds are initially recognised at transaction price and re-measured (to the extent information is available) and valued on a case-by-case and classified as Level 3.

There have been no transfer between Level 1, 2 and 3 during the year ended March 31, 2023 and March 31, 2022.

25. Risk Management and financial objectives:

In order to avoid excessive concentrations of risk, the Company''s policies and procedures include specific guidelines to focus on maintaining a diversified portfolio. Identified concentrations of credit risks are controlled and managed accordingly.

The Company''s financial liabilities comprise loans and borrowing and other payables. The main purpose of these financial liabilities is to finance the Company''s operation. The Company''s financial assets include loans, trade & other receivables and cash & cash equivalents. The Company is exposed to market risk, credit risk and liquidity risk. The Company''s senior management has the overall responsibility for establishing and governing the Company''s financial risk management framework and developing and monitoring the Company''s financial risk management policies. The Company''s financial risk management policies are established to identify and analyze the risks faced by the Company, to set and monitor appropriate controls.

25.1. Market Risk

Market risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises three type of risk i.e. currency risk, interest rate risk and other price risk such as commodity price risk and equity price risk. Financial instruments affected by market risk include trade payable, trade receivables, borrowings etc. Currency risk is not applicable to the Company it is not involved in substantial foreign currency transactions. Interest Rate risk is not applicable to the Company as it has has not taken any debt.

25.2. Price Risk

The Company''s mutual funds and non-listed equity securities are susceptible to market price risk arising from uncertainties about future values of the investment securities. The Company manages the equity price risk through diversification and by placing limits on individual and total instruments. Reports on the portfolio are submitted to the Company''s senior management on a regular basis. The Company''s Board of Directors reviews and approves all investment decisions.

25.3. Credit Risk

Credit risk is the risk that counterparty will not meet its obligations resulting in financial loss to the Company. Credit risk arises primarily from financial assets such as trade receivables, bank balances, loans, investments and other financial assets. At each reporting date, the Company measures loss allowance for certain class of financial assets based on historical trend, industry practices and the business environment in which the Company operates. Credit risk with respect to trade receivables are limited, due to the Company''s customer profiles are well balanced in Government and Non Government customers and diversified amongst in various construction verticals and geographic. All trade receivables are reviewed and assessed on a quarterly basis. Credit risk arising from investments, financial instruments and balances with banks is limited because the counterparties are banks and recognised financial institutions with high credit worthiness.

25.4. Liquidity Risk

Liquidity risk is the risk that the Company will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset. The Company''s approach to managing liquidity is to ensure as far as possible, that it will have sufficient liquidity to meet its liabilities when they are due. Management monitors rolling forecasts of the Company''s liquidity position and cash and cash equivalents on the basis of expected cash flows. The Company takes into account the liquidity of the market in which the entity operates.

Maturities Analysis of Financial Assets and Financial Liabilities :

The table below analyzes the Company''s Financial Assets and Financial Liabilities into relevant maturity groupings based on their contractual maturities:

26. Deferred Tax Assets (Net)

Deferred Tax Assets are recognised only to the extent it is probable that taxable profits will be available against which the losses can be utilised. In the absence of reasonable certainty supported by convincing evidence regarding the availability of future taxable profits, the net deferred tax assets amounting to Rs. 21.10 lakhs (March 31,2022: Rs. 38.53 Lakhs) have not been recognised in the financial statements.

27. Segment reporting

The Company operates in only one business segment i.e."Financial Services - Core Investment Company" and in only one geographic segment i.e India. Accordingly there are no separate reportable segments under Ind AS - 108 - Operating Segments.

28. The Company is a Core Investment Company (CIC) and does not require registration as per notification no. DNBS.PD.CC. No.274/03.02.089/2011-12 dated 11th May, 2012 and which was confirmed by Reserve Bank of India in the letter dated 16th July, 2015. As per the said notification, a Company having an asset size of more than Rs. 100 crores and less than Rs. 500 crores and not accessing public funds is exempt from registration as CIC-NDSI with RBI. Since, the company is not registered with RBI, disclosures requirements as per Core Investment Companies (Reserve Bank) Directions, 2016 are not applicable.

30. Loans or advances (repayable on demand or without specifying any terms or period of repayment) to specified persons

During the year ended March 31, 2023 the Company did not provide any Loans or advances which remains outstanding (repayable on demand or without specifying any terms or period of repayment) to specified persons (Nil as on March 31, 2022)

31. Utilisation of Borrowed Fund & Share Premium

The Company has not received any fund from any person(s) or entity(ies), including foreign entities (Funding Party) with the understanding (whether recorded in writing or otherwise) that the Company shall: (a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (Ultimate Beneficiaries) or (b) provide any guarantee, security or the like on behalf of the ultimate beneficiaries. The Company has not advanced or lent or invested funds to any other person(s) or entity(ies), including foreign entities (Intermediaries) with the understanding that the Intermediary shall: (a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company (Ultimate Beneficiaries) or (b) provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries.

32. Conversion of Zero Coupon Compulsorily Debentures of Bharatiya Sanskriti Village Private Limited into Equity Shares

During the current year, Bharatiya Sanskriti Village Private Limited has converted 20,32,500 no. of of Zero Coupon Compulsorily Convertible Unsecured Debentures into 20,32,500 no. of Equity Shares having a face value of Rs. 10/- per share at a Premium of Rs. 70/- per share.

33. Composite scheme of arrangement for demerger and amalgamation

The Board of Directors at its meeting held on 27th March, 2023 approved a Composite Scheme of Arrangement (the Scheme) for Demerger and Amalgamation amongst Sastasundar Ventures Limited (''Demerged Company'' or ''Amalgamated Company'') and Microsec Resources Private Limited ("Resulting Company") and Sastasundar Healthbuddy Limited ("Amalgamating Company") under Sections 230 to 232 and other relevant provisions of the Companies Act, 2013 and the rules made there under, with effect from 1st April, 2023 ("the Appointed Date"). The Scheme is subject to requisite approvals of the concerned regulatory authorities. Pending such approvals, the scheme has not been recognised in these financial statements.

34. Other Statutory Information

34.1. Benami Property

No proceeding has been initiated or pending against the group for holding any benami property under the Benami Transactions (Prohibition) Act, 1988 (45 of 1988) and rules made thereunder.

34.2. Relationship with Struck off Companies

The Company has no transactions with companies struck off under section 248 of the Companies Act, 2013 or section 560 of Companies Act, 1956.

34.3. Crypto Currency

The Company has not traded or invested in Cryptocurrency transactions / balances during the current year and previous financial year.

34.4. Undisclosed Income

The Company does not have any such transaction which is not recorded in the books of accounts that has been surrendered or disclosed as income during the year ended March 31, 2023 and March 31, 2022 in the tax assessments under the Income Tax Act, 1961 (such as, search or survey or any other relevant provisions of the Income Tax Act, 1961)

34.5. Wilful Defaulter

The Company is not a declared wilful defaulter by any bank or financial institution or other lender.

34.6. The Company is not getting covered under sec 135 of the Companies Act 2013 as the net worth or turnover or net profit during immediate preceding financial year doesnot exceed the limit of the Sec 135(1) of the Companies Act, 2013 and as such the provisions of CSR are not applicable on the Company.

34.7. The Company do not have any charges or satisfaction which is yet to be registered with ROC beyond the statutory period.

34.8. The Company has complied with the number of layers prescribed under clause 87 of section 2 of the Act read with Companies (Restriction on number of Layers) Rules, 2017.

34.9. Since the company has not taken any working capital loan from banks and/ or financial institutions during the year, it is not required to file quarterly return/ statement to the banks and/or financial institutions.

35. Previous year figures have been regrouped/reclassified, where necessary, to confirm to current year classification.

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Mar 31, 2018

1. The Company has Deep Discount Debentures issued by the subsidiary company. Income from Deep Discount Debentures will be accounted for either on maturity or when the right to receive will be established.

2. The Company has a defined employee benefit plan in the form of gratuity. Every employee, who has completed five years or more of services, gets a gratuity on departure @ 15 days of last drawn salary for each completed years of service. The gratuity scheme is entrusted with Life Insurance Corporation of India.

The following tables summarise the components of gratuity expenses recognized in the Statement of Profit and Loss and the funded status and amounts recognized in the balance sheet for the plan.

3. Related Party in terms of Accounting Standard 18 and as per the Companies Act, 2013 are given below:

Name of related parties and description of relationship

i) Related parties where control exists

a) Subsidiaries

Microsec Resources Private Limited

Sastasundar Healthbuddy Limited (Formerly Microsec Health Buddy Limited)

Innogrow Technologies Limited (Formerly Microsec Technologies Limited)

Genu Path Labs Limited (w.e.f, 1st September, 2017)

Microsec Wealth Management Limited (w.e.f, 23rd January, 2018)

Sastasundar Marketplace Limited (Formerly Sasta Sundar Shop Private Limited)

Retailer Shakti Supply Chain Private Limited (Formerly Brandbuddy Engage Analytics Private Limited) PRP Technologies Limited (Amalgamated) [Refer Note 28]

Myjoy Tasty Food Private Limited (Amalgamated) [Refer Note 28]

Myjoy Hospitality Private Limited (Amalgamated) [Refer Note 28]

Myjoy Technologies Private Limited Bharatiya Sanskriti Village Private Limited Microsec Capital Limited (upto 1st December, 2017)

Microsec Insurance Brokers Limited (upto 1st December, 2017)

Microsec Commerze Limited (upto 1st December, 2017)

Myjoy Pharmaceuticals Private Limited (upto 30th November, 2016)

Joybuddy Fun Products Private Limited (upto 30th November, 2016)

b) Limited Liability Partnership (Entities over which control is exercised)

Microsec Invictus Advisors LLP

Ruchika Advisory Services LLP Alokik Advisory Services LLP Dreamscape Advisors LLP Stuti Advisory Services LLP

Kailashwar Advisory Services LLP (upto 16th January, 2018)

Bhavya Advisory Services LLP (upto 20th June, 2017)

Name of other related parties with whom transactions have taken place during the year

ii) Key Management Personnel

Mr. Banwari Lal Mittal (Chairman and Managing Director)

Mr. Amrit Daga (Chief Financial Officer)

Mr. Biplab Kumar Mani (Company Secretary)

4. Segment Reporting

In terms of Accounting Standard 17 - "Segment Reporting" notified by Companies Act, 2013, the Company has only one reportable business segment, i.e., "Financial Services - Core Investment Company" and have only one reportable geographic segment in India.

The Company operates in only one geographical segment i.e. ''Within India'' and no separate information for geographical segment has been given.

5. The Company is a Core Investment Company (CIC) and does not require registration as per notification no. DNBS.PD.CC. No.274/03.02.089/2011-12 dated 11th May, 2012 and which was confirmed by Reserve Bank of India in the letter dated 16th July, 2015. As per the said notification, a Company having an asset size of more than '' 100 crores and less than 500 crores and not accessing public funds is exempt from registration as CIC-NDSI with RBI.

6. Scheme of Arrangement

a) The Scheme of Amalgamation ("the Scheme") of PRP Technologies Limited (PTL), Myjoy Tasty Food Private Limited (MTFPL) and Myjoy Hospitality Private Limited (MHPL) ( the Transferor Companies) with the Company under section 233 of the Companies Act, 2013 and the rules made there under and has been approved by the Central Government through Regional Director, Eastern Region on 9th January, 2018. The appointed date of the said scheme is 1st April'' 2016.

b) All the assets and liabilities of the PRP Technologies Limited (PTL), Myjoy Tasty Food Private Limited (MTFPL) and Myjoy Hospitality Private Limited (MHPL) (Transferor Companies) have been transferred to the Company at their book value.

c) In accordance with the scheme the excess of the aggregate book value of assets and liabilities of the PRP Technologies Limited (PTL), Myjoy Tasty Food Private Limited (MTFPL) and Myjoy Hospitality Private Limited (MHPL) (Transferor Companies) over the net value of Investment held by the company amounting to '' 34,10,62,207 & the Profit for the financial year 2016-17 of '' 15,39,298 has been adjusted with opening revenue reserve.

7. Exceptional Items :

(a) The Company has entered into a Share Purchase Agreement (SPA) on April 19, 2016 for sale of its entire shareholding in Microsec Capital Limited (MCL) and its wholly owned subsidiaries Microsec Commerze Limited and Microsec Insurance Brokers Limited. During the year, the conditions for execution of the agreement has been complied with and the Company has sold its entire shareholding as per the SPA. Accordingly, during the year Profit on sale of Investment of Microsec Capital Limited amounting to Rs, 6,38,86,521/- & Non-Compete Fees (net of expense) amounting to Rs, 7,24,63,901/- has been recognized as an exceptional item in these statement of Profit & Loss.

(b) During the year, the Company had sold its Investment in Retailer Shakti Supply Chain Private Limited (formerly Brandbuddy Engage Analytics Private Limited) at Rs, 16,13,345/-, resulting in a net loss of Rs, 3,43,85,355/-.

(c) During the year, the Company has reversed provision for diminution amounting to Rs, 3,71,00,000 (previous year diminution made of Rs, 1,34,00,000), in value of the Company''s investment in Innogrow Technologies Limited (formerly Microsec Technologies Limited) based on the assessment done by the Company''s management.

In the absence of virtual certainity, the Company has not recognized Deferred Tax Asset in the current year to the extent of Deferred Tax Liability as at 31st March, 2018 i.e. Rs, 1,45,66,229 (2016-17: 1,86,14,368).

8. Previous year''s figures including those in brackets have been regrouped and / or reclassified to conform to this year''s classification. The results for the financial year ended 31st March, 2018 reflect the effect of the Scheme. In view of the above, the figure for the year ended 31st March, 2018 are not comparable.

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Mar 31, 2016

1. CONTINGENT LIABILITIES

(a) The Company has provided Corporate Guarantee of Rs. 9,50,00,000 (2014-15: Rs. 35,00,00,000) against bank guarantee and has created equitable mortgage of Rs. 7,47,55,370 (2014-15: Rs. 7,47,55,370) over its property at Kolkata as security for credit facility extended by a scheduled bank to Microsec Capital Limited (a wholly owned subsidiary company) for the purpose of operations of the business. The amount of facility / guarantee actually availed by the subsidiary as on the balance sheet date amounts to Rs. 2,59,84,441 (2014-15: Rs. 85,267) and Rs. 7,65,88,999 (2014-15: Rs. 22,94,14,495) (net of fixed deposits of Rs. 9,75,00,000 (2014-15: Rs. 16,75,00,000 pledged by the subsidiary with the scheduled banks) respectively.

(b) The Company has provided Corporate Guarantee amounting Rs. 10,00,00,000 against credit facility availed from a Union Bank of India by Microsec Health Buddy Limited (a subsidiary company) for the purpose of purchase of Plant & Machinery and operations of the business. The amount of facility / guarantee actually availed by the subsidiary as on the balance sheet date amounts to Rs. 6,44,56,688 (2014-15: Rs. Nil).

(c) Income tax demand under appeal - Rs. 5,31,850 (2014-15: Rs. 4,69,520). The management believes that the Company has a good case for success in this matter and therefore no provision there against is considered necessary.

(d) Service tax demand - Rs. 65,91,073 (2014-15: Rs. 65,91,073). The management believes that the Company has a good case for success in this matter and therefore no provision there against is considered necessary.

Note : The remuneration to Chairman and Managing Director does not include the provision made for gratuity as it is determined on an actuarial basis for the Company as a whole.

2. The Company has a defined employee benefit plan in the form of gratuity. Every employee, who has completed five years or more of services, gets a gratuity on departure @ 15 days of last drawn salary for each completed years of service. The gratuity scheme is entrusted with Life Insurance Corporation of India.

The following tables summarize the components of gratuity expenses recognized in the Statement of Profit and Loss and the funded status and amounts recognized in the balance sheet for the plan.

3. Minimum Alternate Tax (MAT) credit entitlement of Rs. 31,74,787 (2014-15: Rs. 30,55,715) although available as tax credit for set off in future years as per Income Tax Act, 1961, has not been accounted for in view of accounting policy specified in Note 2(xii) herein.

4. Capital Commitments

Estimated amount of contracts remaining to be executed on capital account and not provided for (net of advances) -Rs. Nil (2014-15: Rs. 14,05,138).

5. Segment Reporting

In terms of Accounting Standard 17 - "Segment Reporting" notified by Companies Act, 2013, the Company has only one reportable business segment, i.e., "Financial Services - Core Investment Company" and have only one reportable geographic segment in India.

The Company operates in only one geographical segment i.e. ''Within India'' and no separate information for geographical segment has been given.

6. The shareholders of the Company had approved conversion of the Company to a Core Investment Company (CIC) on 19th March 2013. During the previous year, the Company had applied to the Reserve Bank of India (RBI) for voluntary surrender of Certificate of Registration (CoR) as Non-Banking Financial Company. Vide intimation dated 16th July, 2015, the RBI has accepted the Company''s application and cancelled the CoR.

A Company having an asset size of more than Rs. 100 crores and not accessing public funds is exempt from registration as CIC with RBI in terms of the notification no. DNBS.PD.CC.No.274/03.02.089/2011-12 dated 11th May, 2012.

7. The Company''s wholly owned subsidiary, Microsec Capital Limited (MCL) and MCL''s wholly owned subsidiary Microsec Commerze Limited (MCZL) are engaged in various financial service businesses. With the objective of divesting certain financial service businesses of MCL and MCZL, the Board of Directors of the Company and MCL have approved the demerger of the Consultancy and Investments undertaking of their respective Companies into a resulting company w.e.f. the appointed date April 01, 2016 subject to the approvals from members and creditors of MCL and MCZL, approval of the Hon''ble High Court at Calcutta and other necessary regulatory approvals.

The Company has also entered into a Share Purchase Agreement dated April 19, 2016 for sale of its entire shareholding in MCL (the demerged Company). This sale is subject to the aforesaid approvals necessary for the demerger.

Consequently, the Company''s investments in Microsec Capital Limited have been reclassified from Non-current to current.

8. Net Deferred Tax Assets of Rs. 1,70,98,921 (2014-15: Rs. 1,67,26,328) has not been recognized in view of accounting policy specified in Note 2(xii) herein.

9. Previous year''s figures including those in brackets have been regrouped and / or reclassified to confirm to this year''s classification.

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Mar 31, 2015

Note : The remuneration to Chairman and Managing Director does not include the provision made for gratuity as it is determined on an actuarial basis for the Company as a whole.

1. The Company has a defined employee benefit plan in the form of gratuity. Every employee, who has completed five years or more of services, gets a gratuity on departure @ 15 days of last drawn salary for each completed years of service. The gratuity scheme is entrusted with Life Insurance Corporation of India.

(i) The estimates of future salary increases considered in actuarial valuation, take account of inflation, seniority, promotion and other relevant factors, such as supply and demand in the employment market.

(ii) The overall expected rate of return on assets is determined based on the market prices prevailing on that date, applicable to the period over which the obligation is to be settled.

(iii) The Company expects to contribute Rs. 1,00,000 (2013-14: Rs. 3,00,000) to Gratuity Fund during April, 2015 to March, 2016.

2. Minimum Alternate Tax (MAT) credit entitlement of Rs. 30,55,715 although available as tax credit for set off in future years as per Income Tax Act, 1961, has not been accounted for in view of accounting policy specified in Note 2(xii) herein.

3. Capital Commitments

Estimated amount of contracts remaining to be executed on capital account and not provided for (net of advances) - Rs. 14,05,138 (2013-14: Rs. 12,72,222).

4. Related Party in terms of Accounting Standard 18 and as per the Companies Act, 2013 are given below: Name of related parties and description of relationship

i) Related parties where control exists

a) Subsidiaries

Microsec Capital Limited

Microsec Resources Private Limited

Microsec Technologies Limited

Microsec Insurance Brokers Limited

Microsec Commerze Limited

PRP Technologies Limited

Microsec Health Buddy Limited

Bharatiya Sanskrit! Village Private Limited

Myjoy Tasty Food Private Limited

Myjoy Hospitality Private Limited

Myjoy Technologies Private Limited

Sasta Sundar Shop Private Limited

Myjoy Pharmaceuticals Private Limited

Joybuddy Fun Products Private Limited (w.e.f. 7th March, 2014)

Microsec Tech Solutions Private Limited (w.e.f. 19th February, 2015)

b) Limited Liability Partnership (Entities over which control is exercised)

Microsec Invictus Advisors LLP Ruchika Advisory Services LLP Alokik Advisory Services LLP Dreamscape Advisors LLP Kailashwar Advisory Services LLP Stuti Advisory Services LLP Bhavya Advisory Services LLP

ii) Name of other related parties with whom transactions have taken place during the year Key Management Personnel

Mr. Banwari Lal Mittal (Chairman and Managing Director) Mr. Ravi Kant Sharma (Managing Director) Mr. Giridhar Dhelia (Chief Financial Officer) Mr. Biplab Kumar Mani (Company Secretary)

5. Segment Reporting

In terms of Accounting Standard 17 - "Segment Reporting" notified by Companies Act, 2013, the Company is engaged in the business of Financing and has only a single reportable segment.

The Company operates in only one geographical segment i.e. 'Within India' and no separate information for geographical segment has been given.

6. The Statutory Auditors has in their audit report for the year ended 31st March, 2014 and review report of 30th June, 2014, 30th September, 2014 and 31st December, 2014 commented regarding concentration of credit / investment norms as provided in paragraph 18 of Non-Banking Financial (Non Deposit Accepting or Holding) Companies Prudential Norms (Reserve Bank) Directions, 2007 (as amended), having exceeded the limits provided therein, in order to become a Non Deposit Accepting Core Investment Company (ND-CIC). The shareholders of the Company had approved conversion of the Company to a Core Investment Company (CIC) on 19th March 2013. Pursuant to the Revised Regulatory Framework for NBFC issued by the Reserve Bank of India (RBI) on 10th November, 2014, the Company having asset size of less than Rs. 500 crores is not required to comply with credit concentration norms on and from that date. During the year, the Company has surrendered its Certificate of Registration and has applied to the RBI for voluntary deregistration as Systematically Important - Non Deposit - Non-Banking Financial Company (NBFC-ND-SI) to the Reserve Bank of India (RBI). Subsequent to the year end, the Company has received intimation from the RBI that its application for deregistration is under process.

A Company having an asset size of more than Rs. 100 crores and not accessing public funds is exempt from the registration as CIC with the RBI in terms of the notification No. DNBS. (PD) 221/CGM (US)-2011 dated 5th January 2011. In view of the above, the management believes that the Company has complied with the extant requirements of operating as a CIC and has also submitted its application with RBI for withdrawal of application for registration as CIC as submitted on 12th August, 2014.

7. The creation of provision for standard assets though not required for a Core Investment Company in terms of the RBI guidelines, however as a matter of abundant precaution the Company has not written back the amount of Rs 10,00,000 lying as on 31st March 2015, pending necessary registration / clarification from the RBI as stated in note 29 above.

8. Effective from 1st April, 2014, the Company has charged depreciation based on the revised remaining useful life of the assets as per the requirement of Schedule II of the Companies Act, 2013. Due to above, depreciation charge for the year ended 31st March, 2015, is higher by Rs. 7,12,659. Further, based on transitional provision provided in Note 7(b) of Schedule II, an amount of Rs. 21,89,844 being depreciation on fixed assets whose useful lives as per Schedule II of the Companies Act, 2013 had expired before commencement of the year has been adjusted with retained earnings as at 1st April, 2014.

9. Net Deferred Tax Assets of Rs. 8,54,587 (2013-14: Rs. 13,55,981) has not been recognized in view of accounting policy specified in Note 2(xii) herein.

10. Previous year's figures including those in brackets have been regrouped and / or reclassified to conform to this year's classification.

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Mar 31, 2014

1 CONTINGENT LIABILITIES

(a) The Company has provided Corporate Guarantee of Rs. 18,63,75,000 (2012-13: Rs. 13,60,00,000) and has created equitable mortgage of Rs. 6,92,70,000 (2012-13: Rs. 6,92,70,000) over its property at Kolkata as security for the said guarantee for credit facility extended by a scheduled bank to Microsec Capital Limited (a wholly owned subsidiary company). Against the above, the credit facility availed and the bank guarantees issued by the bank as on 31st March, 2014 are Rs. Nil (2012-13: Rs. Nil) and Rs. 18,63,75,000 (2012-13: Rs. 13,60,00,000) respectively.

(b) Bank Guarantee outstanding in favour of Indian Clearing Corporation Limited, on behalf of Bombay Stock Exchange - Rs. Nil (2012-13: Rs. 73,75,000).

(c) Income tax demand under appeal - Rs. 4,69,520 (2012-13: Rs. 62,70,480). The management believes that the Company has a good case for success in this matter and therefore no provision thereagainst is considered necessary.

(d) Service tax demand - Rs. 65,91,073 (2012-13: Rs. 8,49,661). The management believes that the Company has a good case for success in this matter and therefore no provision thereagainst is considered necessary.

2. The Company has a defined employee benefit plan in the form of gratuity. Every employee, who has completed five years or more of services, gets a gratuity on departure @ 15 days of last drawn salary for each completed years of service. The gratuity scheme is entrusted with Life Insurance Corporation of India.

The following tables summarise the components of gratuity expenses recognised in the Statement of Profit and Loss and the funded status and amounts recognized in the Balance Sheet for the plan.

(ix) The estimates of future salary increases considered in actuarial valuation, take account of inflation, seniority, promotion and other relevant factors, such as supply and demand in the employment market.

(x) The overall expected rate of return on assets is determined based on the market prices prevailing on that date, applicable to the period over which the obligation is to be settled.

(xi) The Company expects to contribute Rs. 3,00,000 (2012-13: Rs. 3,00,000) to Gratuity Fund during April, 2014 to March, 2015.

3. Minimum Alternate Tax (MAT) credit entitlement of Rs. 30,55,715 although available as tax credit for set off in future years as per Income Tax Act, 1961 has not been accounted for in view of accounting policy specified in Note 2(xi) herein.

4. Capital Commitments

Estimated amount of contracts remaining to be executed on capital account and not provided for (net of advances) Rs. 12,72,222 (2012-13: Rs. 20,92,581).

5. In terms of Accounting Standard 18, notified by the Companies Accounting Standard Rules, 2006, the related party disclosures are given below :

Name of related parties and description of relationship

i) Related parties where control exists

a) Subsidiaries

Microsec Capital Limited Microsec Resources Private Limited Microsec Technologies Limited Microsec Insurance Brokers Limited Microsec Commerze Limited PRP Technologies Limited Microsec Health Buddy Limited * Bharatiya Sanskrit! Village Private Limited * Myjoy Tasty Food Private Limited * Myjoy Hospitality Private Limited * Myjoy Technologies Private Limited * Sasta Sundar Shop Private Limited * Myjoy Pharmaceuticals Private Limited *

b) Limited Liability Partnership (Entities over which control is exercised)

Microsec Invictus Advisors LLP Ruchika Advisory Services LLP * Alokik Advisory Services LLP * Dreamscape Advisors LLP *

Kailashwar Advisory Services LLP * Stuti Advisory Services LLP * Bhavya Advisory Services LLP **

* w.e.f. 25th March, 2013

** w.e.f. 1st January, 2013

ii) Name of other related parties with whom transactions have taken place during the year

a) Associate Company

Microsec Health Buddy Limited (upto 24th March, 2013)

b) Key Management Personnel

Mr. Banwari Lal Mittal (Chairman and Managing Director) Mr. Ravi Kant Sharma (Managing Director) Mr. Giridhar Dhelia (Chief Financial Officer)

6. Segment Reporting

The Company has re-assessed its business segment with regard to business carried out during the year. Accordingly the Company has only one reportable business segment i.e. "Financial Services" as against "Financing and Investment" and "Investment Banking and related services" as reported in the previous year. The Company continues to have only one reportable geographical segment in India.

7. The shareholders of the Company had approved the conversion of the Company into a Core Investment Company (CIC) vide the postal ballot on 19th March, 2013. Accordingly, the Company had filed an application with the Reserve Bank of India (RBI) on 7th June 2013 for exemption from the concentration of credit / investment norms (credit concentration norms) as provided in paragraph 18 of Non-Banking Financial (Non Deposit Accepting or Holding) Companies Prudential Norms (Reserve Bank) Directions, 2007 (as amended) to enable the Company to convert into a CIC. The RBI, vide its letter dated 20th August, 2013 had directed the Company to comply with the CIC norms and submit an application for registration as CIC by 31st December, 2013. The Company has complied with the requirements applicable to CIC and as a matter of abundant precaution has filed such application for registration on 31st December, 2013 though the Company is not required to obtain such registration under applicable RBI guidelines. The RBI has, vide intimation dated 28th January, 2014, sought certain documents / information to be able to scrutinize the aforesaid application which has been provided by the Company.

A Company having an asset size of more than Rs. 100 crores and not accessing public funds is exempt from the registration as CIC with the RBI under Section 45IA of the RBI Act, 1934 in terms of the notification No. DNBS.PD.221/ CGM(US) 2011 dated 5th January, 2011. In view of the above, the management believes that the Company has complied with the extant requirements of operating as a CIC, however approval from the RBI in this regard is awaited. Pending such approval, the Company continues to hold its NBFC registration even though it neither carried out any activity other than that of CIC during the year nor intends to do so in future.

8. The creation of provision for standard assets though not required for a Core Investment Company in terms of the RBI guidelines, however as a matter of abundant precaution the Company has not written back the amount of Rs 26,00,000 lying as on 31st March, 2014, pending necessary registration / clarification from the RBI as stated in note 33 above.

9. Additional information as per guidelines issued by the Reserve Bank of India in respect of Non - Banking Financial Companies (Non Deposit Accepting or Holding) systemically important (NBFC-ND-SI) are given in Annexure - I attached herewith.

10. Previous year''s figures including those in brackets have been regrouped and / or rearranged wherever necessary.

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Mar 31, 2013

1. BASIS OF PREPARATION

he financial statements have been prepared to comply in all material aspects with the Accounting Standards notified by the Companies (Accounting Standards) Rules, 2006 (as amended) and the relevant provisions of the Companies Act, 1956 and the directives as prescribed by the Reserve Bank of India for Non Banking Financial Companies. The financial statements have been prepared under the historical cost convention on an accrual basis. However, income is not recognized and also provision is made in respect of non-performing assets as per the prudential norms prescribed by the Reserve Bank of India. The accounting policies applied by the Company, are consistent with those used in the previous year.

2. Contingent Liabilities:

(a) The Company has provided Corporate Guarantee of Rs. 13,60,00,000 (Rs. 20,00,00,000) and has created equitable mortgage of Rs. 6,92,70,000 (Rs. 4,16,50,000) over its property at Kolkata as security for the said guarantee for credit facility extended by a scheduled bank to Microsec Capital Limited (a wholly owned subsidiary company). Against the above, the credit facility availed and the bank guarantees issued by the banks as on 31st March, 2013 are Rs. Nil (Rs. Nil) and Rs. 13,60,00,000 (Rs. 20,00,00,000) respectively.

(b) The Company has provided Corporate Guarantee of Rs. Nil (Rs. 10,19,00,000) for credit facility extended by a scheduled bank to Microsec Technologies Limited (an ultimate wholly owned subsidiary company). Against the above, the credit facility availed as on 31st March 2013 is Rs. Nil (Rs. 3,00,00,000).

(c) Bank Guarantee outstanding in favour of Bombay Stock Exchange - Rs. Nil (Rs. 73,75,000).

(d) Bank Guarantee outstanding in favour of Indian Clearing Corporation Limited, on behalf of Bombay Stock Exchange - Rs. 73,75,000 (Rs. Nil).

(e) Income tax demand under appeal - Rs. 62,70,480 (Rs. 58,00,960). The management believes that the Company has a good case for success in this matter and therefore no provision thereagainst is considered necessary.

(f) Service tax demand - Rs. 8,49,661 (Rs. Nil). The management believes that the Company has a good case for success in this matter and therefore no provision thereagainst is considered necessary.

3. The Board of Directors at their meeting held on February 8, 2013 has approved the restructuring proposal of the Company by converting it into a Systemically Important Core Investment Company (CIC-NDSI) by September 30, 2013 and noted that in order to become the CIC-NDSI, the concentration of credit / investment norms as provided in Para 18 of Non-Banking Financial (Non-Deposit Accepting or Holding) Companies Prudential Norms (Reserve Bank) Directions, 2007 (as amended) during the transition period will not be complied. Further, the same was also approved by the shareholders of the Company through Postal Ballot, the results of which were declared on March 19, 2013.

Accordingly, the Company has filed an application to the Reserve Bank of India (RBI) on March 4, 2013 to provide an exemption from complying with exposure norms for concentration of credits / investments as prescribed by the Reserve Bank of India for Non Deposit accepting Systemic Important Non Banking Financial Company during the transition period which is pending for approval by RBI.

Pursuant to CIC guidelines issued by the RBI, as on March 31, 2013, the Company holds more than 90% of its Net Assets in the form of investment in equity shares, preference shares and debentures in group companies, of which more than 60% of its net assets is invested in equity shares (including investments in Compulsorily convertible Debentures to be converted within a period not exceeding 10 (ten) years from the date of issue).

4. The Company had debts of Rs. 10,36,64,083 due from Futuristic Steel Limited, which were repayable after a period of three years. During the year, the Company has transferred these debts to Shoparna Brothers Private Limited at Rs. 8,99,96,028 resulting into a loss of Rs. 1,36,68,055 being the difference between the original amount of debts and the current discounted value thereof.

Note : The remuneration to Chairman and Managing Director does not include the provision made for gratuity as it is determined on an actuarial basis for the Company as a whole.

5. The Company has a defined benefit gratuity plan. Every employee, who has completed five years or more of services, gets a gratuity on departure @ 15 days of last drawn salary for each completed years of service. The scheme is funded with Life Insurance Corporation of India.

6. Minimum Alternate Tax (MAT) credit entitlement of Rs. 27,98,703 related to financial year 2010-11 although available as tax credit for set off in future years as per Income Tax Act, 1961, has not been accounted for in view of accounting policy specified in Note 2(xi) herein.

7. Capital Commitments

Estimated amount of contracts remaining to be executed on capital account and not provided for (net of advances) - Rs. 20,92,581 (Rs. 25,66,863).

8. In terms of Accounting Standard 18, notified by the Companies Accounting Standard Rules, 2006, the related party disclosures are given below:

Name of related parties and description of relationship

i) Related parties where control exists

a) Subsidiaries

Microsec Capital Limited

Microsec Resources Private Limited

Microsec Technologies Limited

Microsec Insurance Brokers Limited

Microsec Commerze Limited

PRP Technologies Limited

Microsec Health Buddy Limited (formerly Myjoy Fun and Food Private Limited) *

Bharatiya Sanskrit! Village Private Limited*

Myjoy Tasty Food Private Limited*

Myjoy Hospitality Private Limited * Myjoy Technologies Private Limited* SastaSundar Shop Private Limited* Myjoy Pharmaceuticals Private Limited* b) Limited Liability Partnership (Entities over which control is exercised) Microseclnvictus Advisors LLP Ruchika Advisory Services LLP* Alokik Advisory Services LLP* DreamscapeAdvisors LLP* Kailashwar Advisory Services LLP* Stuti Advisory Services LLP* Bhavya Advisory Services LLP** *w.e.f. 25th March, 2013 **w.e.f. 1st January, 2013 ii) Name of other related parties with whom transactions have taken place during the year

a) Associate Company

Microsec Health Buddy Limited (formerly Myjoy Fun and Food Private Limited) (w.e.f. 16th August, 2011 and upto 24th March, 2013)

b) Key Management Personnel

Mr. Banwari Lai Mittal (Chairman and Managing Director) Mr. Ravi Kant Sharma (Director) (upto August 4, 2011) Mr. Ravi Kant Sharma (Managing Director) (w.e.f. August 5, 2011) Mr. Giridhar Dhelia (Chief Financial Officer)

Notes:

I. Finance Costs pertaining to the segments having operations which are primarily of financial nature has been considered as part of segment results and not disclosed separately.

II. Business Segments: - The business segment has been identified on the basis of the services of the Company. Accordingly, the Company has identified "Financing & Investment" and "Investment Banking & related Services" as business segments.

a) Financing and Investment - consists of financing of loans and investments in shares & securities and Income from Royalty.

b) Investment Banking and related Services - consists of financial consultancy and debt syndication.

III. Geographical Segments: - The Company operates in only one geographical segment i.e. ''Within India'' and no separate information for geographical segment has been given.

9. Additional information as per guidelines issued by the Reserve Bank of India in respect of Non - Banking Financial Companies (Non Deposit Accepting or Holding ) systemically important (NBFC-ND-SI) are given in Annexure -1 attached herewith.

10. Previous year''s figures including those in brackets have been regrouped and / or rearranged wherever necessary.

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Mar 31, 2012

1. Basis of preparation

The financial statements have been prepared to comply in all material aspects with the Accounting Standards notified by the Companies (Accounting Standards) Rules, 2006 (as amended) and the relevant provisions of the Companies Act, 1956 and the directives as prescribed by the Reserve Bank of India for Non Banking Financial Companies. The financial statements have been prepared under the historical cost convention on an accrual basis. However, income is not recognized and also provision is made in respect of non-performing assets as per the prudential norms prescribed by the Reserve Bank of India. Except otherwise mentioned, the accounting policies applied by the Company, are consistent with those used in the previous year.

(a) Terms/Rights attached to the equity shares

The Company has only one class of equity shares having par value of Rs. 10 per share. Each holder of equity shares is entitled to one vote per share. The Company declares and pays dividends in Indian Rupees. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting.

During the year ended March 31, 2012, the amount of per share dividend recognised as distribution to equity share holders is Re. 1 (Re. 1).

In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining 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.

As per records of the Company, including its register of shareholders/members and other declarations received from shareholders regarding beneficial interest, the above shareholding represents both legal and beneficial ownership of shares.

2. Contingent Liabilities:

(a) The Company has provided Corporate Guarantee of Rs. 20,00,00,000 (Rs. 25,00,00,000) and has created equitable mortgage of Rs. 4,16,50,000 (Rs. 4,16,50,000) over its property at Kolkata as security for the said guarantee for credit facility extended by a scheduled bank to Microsec Capital Limited (a wholly owned subsidiary company). Against the above, the credit facility availed and the bank guarantees issued by the banks as on March 31, 2012 are Rs. Nil (Rs. 56,298) and Rs. 20,00,00,000 (Rs. 25,00,00,000) respectively.

(b) The Company has provided Corporate Guarantee of Rs. 10,19,00,000 (Rs. 10,19,00,000) for credit facility extended by a scheduled bank to Microsec Technologies Limited (an ultimate wholly owned subsidiary company). Against the above, the credit facility availed as on 31st March 2012 is Rs. 3,00,00,000 (Rs. 1,00,00,000).

(c) Bank Guarantee outstanding in favour of Bombay Stock Exchange - Rs. 73,75,000 (Rs. 73,75,000).

(d) Income Tax demand under appeal - Rs. 58,00,960 (Rs. Nil). The management believe that the Company has a good case for success in this matter and therefore no provision there against is considered necessary.

3. The Reserve Bank of India through notification no. DNBS 223/CGM (US) - 2011 dated January 17, 2011 directed all Non Banking Financial Companies to make a provision of 0.25% on Standard assets and accordingly the Company has made a provision of Rs. 42,00,000 (Rs. 36,99,761) as at March 31, 2012.

4. The Reserve Bank of India vide notification no. DNBS.PD/CC.N0.214/03.02.2002/2010-11 dated March 30, 2011 has issued a direction that no Non Banking Financial Company shall contribute to the capital of a partnership firm or become a partner of such firm. Accordingly, the Company has retired from partnership in Microsec Invictus Advisors LLP w.e.f. March 15, 2012. In accordance with the terms and conditions of the limited liability partnership, the Company has shared loss of Rs. 20,42,591 which has been debited to the statement of profit and loss of the Company.

5. Till the last year, the Company was amortizing copyrights on a straight line basis over a period of ten years from the date these assets became available for use. In the current year, the Company has re-assessed the estimated useful life of such intangible assets and has written it off over the useful life of three years. Because of the above change, the profit before tax for the year and carrying value of copyrights is lower by Rs. 3,48,63,712.

6. The Company has submitted an application on December 16, 2011 to the Regional Provident Fund Commissioner, West Bengal for registration for provident fund which was allotted by the Provident Fund authorities on January 31, 2012, with retrospective effect from October 1, 2011. On registration, the Company has deposited all provident fund contributions for the period from October 2011 to January 2012 on February 13, 2012.

7. The Company has submitted an application on December 30, 2011 to the Regional Employees' State Insurance Corporation, West Bengal for registration for Employees' State Insurance which was allotted by the Employees' State Insurance authorities on January 10, 2012, with retrospective effect from October 1, 2011. On registration, the Company has deposited all Employees' State Insurance contributions for the period from October 2011 to December 2011 on January 18, 2012.

8. The Company has a defined benefit gratuity plan. Every employee, who has completed five years or more of services, is entitled to gratuity on terms not less favorable than the provisions of the payment of Gratuity Act, 1972. The scheme is funded with Life Insurance Corporation of India.

The following tables summarise the components of gratuity expenses recognised in the Statement of Profit and Loss and the funded status and amounts recognized in the balance sheet for the plan.

(ix) The estimates of future salary increases considered in actuarial valuation, take account of inflation, seniority, promotion and other relevant factors, such as supply and demand in the employment market.

(x) The overall expected rate of return on assets is determined based on the market prices prevailing on that date, applicable to the period over which the obligation is to be settled.

(xi) The Company expects to contribute Rs. 2,00,000 (Rs. 5,00,000) to Gratuity Fund during April, 2012 to March, 2013.

9. Minimum Alternate Tax (MAT) credit entitlement of Rs. 27,98,703 related to financial year 2010-11 although available as tax credit for set off in future years as per Income Tax Act, 1961, has not been accounted for in view of accounting policy specified in Note 2(xii) herein.

10. Capital Commitments

Estimated amount of contracts remaining to be executed on capital account and not provided for (net of advances)

- Rs. 25,66,863 (Rs. Nil).

11. In terms of Accounting Standard 18, notified by the Companies Accounting Standard Rules, 2006, the related party disclosures are given below :

Name of related parties & description of relationship Subsidiary Companies (Enterprise where control exists)

Microsec Capital Limited (MCap)

Microsec Insurance Brokers Limited Microsec Commerze Limited PRP Technologies Limited Microsec Resources Private Limited Microsec Technologies Limited Associate Company

Myjoy Fun and Food Private Limited (w.e.f. August 16, 2011)

Limited Liability Partnership (Entity over which control is exercised)

Microsec Invictus Advisors LLP (up to March 15, 2012)

Key Management Personnel

Mr. Banwari Lal Mittal (Chairman and Managing Director)

Mr. Ravi Kant Sharma (Director) (up to August 4, 2011)

Mr. Ravi Kant Sharma (Managing Director & CEO) (w.e.f. August 5, 2011)

Mr. Giridhar Dhelia (Chief Financial Officer) (w.e.f. November 9, 2010)

Mr. Pankaj Kumar Kedia (Chief Financial Officer) (up to October 20, 2010)

Enterprises in which Key Management Personnel Exercise Significant Influence Luv-Kush Projects Limited

Notes :

I. Business Segments : The business segment has been identified on the basis of the services of the Company. Accordingly, the Company has identified "Financing & Investment" and "Investment Banking & related Services" as business segments.

a) Financing & Investment - Consists of financing of loans and investments in shares & securities and Income from Royalty.

b) Investment Banking & related Services - Consists of financial consultancy and debt syndication.

II. Geographical Segments : The Company operates in only one geographical segment i.e. 'Within India' and no separate information for geographical segment has been given.

12. Pursuant to the provision of section 61 of the Companies Act, 1956, the shareholders of the Company in the Annual General Meeting held on August 4, 2011, have approved the variation in the utilisation of the Issue Proceeds from Initial Public Offer (IPO), arising out of the issue of equity shares allotted pursuant to the prospectus dated September 24, 2010.

* Represents the amount invested in equity shares of Microsec Capital Limited (MCap) which is lying unutilized by MCap and thus invested in fixed deposits and bonds.

13. Additional information as per guidelines issued by the Reserve Bank of India in respect of Non - Banking Financial (Non Deposit Accepting or Holding) systemically important (NBFC-ND-SI) are given in Annexure -1 attached herewith.

14. Previous year's figures including those in brackets have been regrouped and/or rearranged wherever necessary.

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Mar 31, 2011

I. The Company has made a public issue of 1,25,00,000 Equity Shares of Rs. 10 each for cash at a premium of Rs. 108 per equity share to Qualified Institutional Bidders, Non-Institutional Bidders and to Retail Individual Bidders which had closed on 21st September, 2010. The Equity Shares of the Company were listed on the National Stock Exchange and Bombay Stock Exchange ("the Stock Exchanges") on 5th October, 2010.

ii. Contingent Liabilities

(a) The Company has provided Corporate Guarantee of Rs. 29,16,50,000 (Rs. 15,00,00,000) and has created equitable mortgage of Rs. 4,16,50,000 over its property at Kolkata as security for the said guarantee for credit facility extended by a scheduled bank to Microsec Capital Limited (a wholly owned subsidiary Company). Against the above, the credit facility availed and the bank guarantees issued by the banks as on 31st March 2011 are Rs. 56,298 (Rs. 4,00,00,000) and Rs. 25,00,00,000 (Rs. 5,60,00,000) respectively

(b) The Company has provided Corporate Guarantee of Rs. 10,19,00,000 (Rs. 12,50,00,000) for credit facility extended by a scheduled bank to Microsec Technologies Limited (an ultimate wholly owned subsidiary Company). Against the above, the credit facility availed as on 31st March 2011 is Rs. 1,00,00,000 (Rs. 83,434).

(c) Bank Guarantee outstanding in favour of Bombay Stock Exchange - Rs. 73,75,000 (Rs. Nil).

iv Based on the information/documents available with the Company, no creditor is covered under Micro, Small and Medium Enterprise Development Act, 2006. As a result, no interest provision/payments have been made by, the Company to such creditors, if any, and no disclosures thereof are made in these accounts.

v. The Reserve Bank of India (RBI) vide its Notification No. DNBS 223/CGM (US) - 2011 dated 17th January, 2011 has issued direction to all NBFCs to make provision of 0.25% on the standard assets with immediate effect. Accordingly, the Company has made a provision of Rs. 36,99,761 on standard assets as at 31st March, 2011.

x. From the current year, the Company have decided to encash the leave liability due to its employees and thus a total sum of Rs. 4,77,300 (after adjusting provision of Rs. 51,183 made in the past) has been paid to the employees and charged to Profit & Loss Account. Because of the above change, the profit for the year is lower by Rs. 1,86,016.

xi. Diminution, based on the market value, in the value of certain long term quoted investments as on the Balance Sheet date, being temporary in nature, has not been provided.

xii. The Company has formed a Limited Liability Partnership (LLP) namely Microsec Invictus Advisors LLP with an individual on 19th July 2010 to carry on the business of professional and consultancy services.

The details of investment in Limited Liability Partnership are as follows :

Name of the Firm : Microsec Invictus Advisors LLP

Total Capital (100% invested by Microsec Financial Services Limited) : Rs. 9,00,000

xiii. The Company has a defined benefit gratuity plan. Every employee, who has completed five years or more of services, is entided to gratuity on terms not less favorable than the provisions of the payment of Gratuity Act, 1972. The scheme is funded with Life Insurance Corporation of India.

(ix) The estimates of future salary increases considered in actuarial valuation, take account of inflation, seniority, promotion and other relevant factors, such as supply and demand in the employment market.

(x) The overall expected rate of return on assets is determined based on the market prices prevailing on that date, applicable to the period over which the obligation is to be setded.

(xi) The Company expects to contribute Rs. 5,00,000 (Rs. 2,50,000) to Gratuity Fund during April, 2011 to March, 2012.

xv. Minimum Alternate Tax (MAT) credit entitlement of Rs. 7,42,387 has been set off against tax payable for the current year.

xvi. In terms of Accounting Standard 18, notified by the Companies Accounting Standard Rules, 2006, the related party disclosures are given below:

Name of related parties & description of relationship

Subsidiary Companies

Microsec Capital Limited

Microsec Insurance Brokers Limited

Microsec Commer.e Limited

PRP Technologies Limited

Microsec Resources Private Limited

Microsec Technologies Limited

Limited Liability Partnership (Entity over which control is exercised)

Microsec Invictus Advisors LLP (w.e.f 19th July 2010)

Key Management Personnel

Mr. Banwan Lai Mittal (Chairman and Managing Director)

Mr. Ravi Kant Sharma (Director)

Mr. Laxmi Narayan Mandhana (Chief Financial Officer) (upto 20th November, 2009)

Mr. Pankaj Kumar Kedia (Chief Financial Officer) (upto 20th October, 2010)

Mr. Gindhar DheMa (Chief Financial Officer) (w.e.f. 9th November, 2010)

Enterprises in which Key Management Personnel Exercise Significant Influence

Luv-Kush Projects Limited

xx. Additional information as per guidelines issued by the Reserve Bank of India in respect of Non-Banking Financial (Non Deposit Accepting or Holding) systemically important (NBFC-ND-SI) which has become applicable to the Company during the year is given in Annexure -1 attached herewith.

xxi. Previous year's figures including those in brackets have been re-grouped and/or re-arranged wherever necessary