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Notes to Accounts of Motor & General Finance Ltd.

Mar 31, 2015

1. Share Capital

a.) The Company has one class of equity shares having a par value of Rs. 10 per Share. Each Shareholder is eligible for one vote per share held. The dividend proposed (if any) by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting, except in case of interim dividend(if any). In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the company after distribution of all preferential amounts, in proportion to their shareholding.

2. OTHER NOTES TO FINANCIAL STATEMENTS

i) CONTINGENT LIABILITIES: (Amount in Rs.)

Particulars March 31, March 31 2015 2014

a) Guarantees given to Sales Tax and 464,509 518,471 other authorities, on behalf of the Company (against pledge of fixed deposits

b) Other disputed demands not acknowledged as debts

i) Electricity Charges (BSES) 6,924,304 6,924,304

ii) Service Tax 10,351,192 -

iii) Employee's State Insurance 7,475,606 - Corporation

ii) In view of the company's substantial holding in Jayabharat Credit Limited (JBCL) and to preserve company's reputation and image, the Board of Directors of the company, on the legal opinion obtained, had taken a conscious decision to give Inter-Corporate Deposit (ICD), at the rate of interest mutually agreed in the financial year 2010-11 to meet the contingency in repayment of public deposits and banks of JBCL. During the year the Company has recovered substantial amount against the aforesaid outstanding. The amount due as on March 31, 2015 is Rs. 17.38 crores (Previous Year ended March 31, 2014 Rs. 41.44 crores). The company has taken steps to realize the balance outstanding amount at the earliest.

iii) Deferred Taxation

In accordance with AS-22 on "Accounting for Taxes on Income", the company has recognized deferred tax assets on such timing differences based on the future income available so that such deferred tax assets can be reversed. Deferred Tax Assets have been recognized on account of timing difference arising between book depreciation and tax depreciation, provision for leave encashment, gratuity, diminution in the value of investments and carry forward of business losses.

iv) Current Taxation:-

a) Provision for income tax (MAT) for the year has been made after considering relief available under the Income Tax Act, 1961.

b) Income tax assessments up to the financial year 2011-12 (Assessment Year 2012-13) have been completed and there are no pending demands against the Company.

v) Segment information:-

The Company's business activities predominantly relate to leasing and development of premises. Accordingly revenue from the leasing of premises comprises the primary basis of segmental reporting. Hence segmental reporting as defined in Accounting Standard - 17 is not applicable.

vi) Balance in parties accounts whether in debit or credit are subject to confirmation.

vii) Disclosure of details pertaining to related party transactions entered into during the year in terms of Accounting Standard -18 "Related Party Disclosures" are given below:

a) List of Related Parties

i) Under Common Control

India Lease Development Limited, Jayabharat Credit Limited, Bahubali Services Limited, MGF Estate Private Limited, MGF Securities Private Limited, Cards Services India Private Limited, Associated Traders & Engineers Private Limited ,Local Goods Carriers Private Limited, Ram Prakash & Co. Private Limited, Grosvenor Estates Private Limited and GEE GEE Holdings Private Limited.

ii) Enterprises over which the key management personnel are able to exercise significant influence.

Nil

iii) Key Management Personnel

Shri Rajiv Gupta (Chairman & Managing Director & Chief Executive Officer)

Smt Arti Gupta (Joint Managing Director)

Shri Arun Mitter (Executive Director)

Shri M.K. Madan (Vice President & Company Secretary & Chief Financial Officer)

ii) Directors Sitting Fees

Sundry Expenses include Rs. 212,472/- (Previous Year Rs. 129,216/-) paid towards Directors' Sitting Fees for attending Board Meetings. No Meeting Fee was paid for attending Committee Meetings.

iii) Directors Travelling

Transport, Travelling and Motor Car Expenses include Rs. 203,887/- (Previous Year Rs. 55,484/-) for Directors Travelling.

x) Pursuant to enactment of the Companies Act, 2013, during the year ended March 31,2015, the company has applied useful lives of tangible fixed assets as prescribed in Schedule II of the Companies Act, 2013 except for two buildings where different useful life is taken based on independent technical evaluation, taking into account the nature of the asset, the estimated usage of the asset and the operating conditions surrounding the use of the asset etc. Accordingly the depreciation has been provided by depreciating the carrying value of the asset (Net of residual value of 5%) over the revised/remaining life of individual assets. Had the Company continued with the previously assessed useful lives, charge for depreciation for the year ended March 31,2015 would have been higher by Rs. 872,230.

xi) Corporate Social Responsibility

As per the provisions of section 135 of the Companies Act, 2013 the Company was required to spend Rs. 833,000 on corporate social responsibility. However, the Company has incurred Rs.15,40,000 on promoting of education.

xiii) There is no amount due to the Micro Small and Medium Enterprises in terms of "The Micro Small and Medium Enterprises Development Act, 2006"

xiv) The assets and liabilities are classified between current and non current considering 12 months period as operating cycle.

xv) Previous year figures have been regrouped/rearranged wherever considered necessary.


Mar 31, 2014

Notes 1:

a) Term Loans from Kotak Mahindra Bank Limited are secured by way of mortgage of one of company''s properties and hypothecation of trade receivables including all present and future lease rentals and personal guarantee of two directors. The principal of term loans are repayble by way of monthly installments and the rate of interest ranging from 13.25 % to 13.50%. Loan repayble in FY 2015-16 Rs. 54,447,235/-, FY 2016-17 Rs. 21,016,392/- FY 2017-18 Rs. 24,019,974/- FY 2018-19 Rs. 12,109,248/-.

b) Term Loan from Kotak Mahindra Prime Ltd. is secured by way of first & exclusive equitable mortgage of one of the properties of the company and personal guarantee of two Directors. The principal of term loan is repayble by way of monthly instalments and the rate of interest is ranging from 13.25% to 13.50%. Loan repayble in FY 2015-16 Rs. 25,850,436/-.

c) Working Capital Loan from Kotak Mahindra Investments Limited is secured against the securities of mutual funds, shares etc. held by the directors and their family members and group entities. The loan is repayble in sixty months and the rate of interest is 12.25% .

2. OTHER NOTES TO FINANCIAL STATEMENTS

i) CONTINGENT LIABILITIES: (Rs.)

Particulars March 31, 2014 March 31, 2013

a)Guarantees given to Sales 518,471 481,895 Tax and other authorities, on behalf of the company (against pledge of fixed deposits)

b)Other disputed demands not acknowledged as debts

i)Electricity charges(BSES) 6,924,304 6,992,324

ii)Property Tax (MCD) - 4,479,446

ii) The Company opted to voluntary exit from the NBFC activities and surrendered the Certificate of Registration to the Reserve Bank of India, which has been cancelled vide their order dated June 18,2013 and as such, it is no longer a NBFC

iii) In view of the company''s substantial holding in Jayabharat Credit Limited (JBCL) and to preserve company''s reputation and image, the Board of Directors of the company had taken a conscious decision to give Inter-Corporate Deposit (ICD), at the rate of interest mutually agreed in the financial year 2010-11 to meet the contingency in repayment of public deposits and banks of JBCL. The outstanding amount of the ICD is Rs. 41,43,50,000 (Previous Year Rs. 34,59,00,000) will be settled once JBCL becomes a debt free company. However, the interest on the ICD is being recovered regularly.

iv) Non current Long Term Investments are to be valued at cost in terms of Accounting Standard-13 "Accounting for Investments" issued by the Institute of Chartered Accountants of India subject to provision for diminution in value, other than temporary in nature. However, considering the long term nature and other related matters, investments in quoted companies amounting to Rs. 90,505,731 (Previous Year Rs. 90,505,731) have been valued at cost and the temporary short fall of Rs. 51,126,419 (Previous Year Rs. 28,042,951.) has not been provided for. As in the opinion of the management, the same is temporary in nature.

v) The company in one of the properties, on the demand raised by the Municipal Corporation of Delhi, had deposited Rs. 12,111,019 towards conversion charges and additional FAR charges for commercial use. The matter is under negotiation with tenant and the management is hopeful to recover the same. Any further demand, if raised, will be deposited from the amount recovered from the tenants.

vi) Deferred Taxation

In accordance with AS-22 on "Accounting for Taxes on Income", the company has recognized deferred tax assets on such timing differences based on the future income available so that such deferred tax assets can be reversed. Deferred Tax Assets have been recognized on account of timing difference arising between book depreciation and tax depreciation, provision for leave encashment, gratuity, diminution in the value of investments and carry forward of business losses.

vii) Current Taxation:-

a) Provision for Income Tax (MAT) for the year has been made after considering relief available under the Income Tax Act, 1961.

b) Income Tax assessments up to the Financial Year 2010-11 (Assessment Year 2011-12) have been completed and there are no pending demands against the company.

viii) Segment information:-

The company''s business activities predominantly relate to leasing and development of premises. Accordingly revenue from the leasing of premises comprises the primary basis of segmental reporting. Hence segmental reporting as defined in Accounting Standard - 17 is not applicable.

ix) Balance in parties accounts whether in debit or credit are subject to confirmation.

x) During the year, completion certificate in respect of commercial project has been received. It has been shown under the head non-current investments amounting to Rs. 8443.80 lacs as on March 31, 2013. As per the management''s decision the same has been transferred as on March 31, 2014 under the head stock in trade.

xi) Disclosure of details pertaining to related party transactions entered into during the year in terms of Accounting Standard -18 "Related Party Disclosures" issued by the Institute of Chartered Accountants of India:

a) List of Related Parties

(As identified and certified by the management)

i) Under Common Control

India Lease Development Limited, Jayabharat Credit Limited, Bahubali Services Limited, MGF Estate Private Limited, MGF Securities Private Limited, Cards Services India Private Limited, Associated Traders & Engineers Private Limited ,Local Goods Carriers Private Limited,Ram Prakash & Co.Private Limited, Grosvenor Estates Private Limited and GEE GEE Holdings Private Limited.

ii) Enterprises over which the key management personnel are able to exercise significant influence.

Nil

iii) Key Management Personnel

Shri Rajiv Gupta, Smt Arti Gupta and Shri Arun Mitter.

xii) There is no amount due to the Micro Small and Medium Enterprises in terms of "The Micro Small and Medium Enterprises Development Act, 2006"

xiii) The assets and liabilities are classified between current and non current considering 12 months period as operating cycle.

xiv) Previous year figures have been regrouped/rearranged wherever considered necessary.


Mar 31, 2013

1. CONTINGENT LIABILITIES: (Rs.)

Particulars March 31, 2013 March 31, 2012

a) Guarantees given to Sales Tax and other authorities, on behalf 481,895 424,439 of the company (against pledge of fixed deposits)

b) Other disputed demands not acknowledged as debts

i) Electricity charges(BSES) 6,992,324 6,924,303

ii) Interest on Property Tax (MCD) 4,752,630 -

2. The Company continues to hold the certificate issued by Reserve Bank of India in Category "B" as Non-Accepting Deposits Non Banking Finance Company.

3. In terms of Notification No.RBI/2006-07/200/DNBS/PDCC No.85/03.02.089 dated December 6, 2006 for continuation of business of NBFI, under Section 45-1A of the RBI Act,1934 pending issuance of fresh certificate of registration, the company continues to correspond to the classification as per the certificate issued under the NBFCs norms.

4. In view of the Company''s substantial holding in Jayabharat Credit Limited (JBCL) and to preserve Company''s reputation and image, the Board of Directors of the Company had taken a conscious decision to give Inter-Corporate Deposit (ICD), at the rate of interest mutually agreed in the financial year 2010-11 to meet the contingency in repayment of public deposits and banks of JBCL. The outstanding amount of the ICD is Rs. 345,900,000 (Previous Year Rs. 254,100,000) will be settled once JBCL becomes a debt free company. However, the interest on the ICD is being recovered regularly.

5. Non current long term investments are to be valued at cost in terms of Accounting Standard-13 "Accounting for Investments" issued by the Institute of Chartered Accountants of India and as recommended by Reserve Bank of India''s guidelines, subject to provision for diminution in value, other than temporary in nature. However, considering the long term nature and other related matters, investments in quoted companies amounting to Rs. 90,505,731 (Previous Year Rs. 90,505,731) have been valued at cost and the temporary short fall of Rs. 28,042,951. (Previous Year Rs. 30,598,031) has not been provided for. As in the opinion of the management, the same is temporary in nature.

6. The Company could not comply with the Reserve Bank of India guidelines prescribed for Non Banking Financial Companies Prudential Norms (Reserve Bank) Directions, 1998 with regard to credit concentration exposure in respect of one company which have become in excess of prescribed limits. However, RBI has been requested to give exemption in exceeding the exposure.

7. The Company in one of the properties, on the demand raised during the year, by the Municipal Corporation of Delhi, has deposited Rs. 1,40,29,312/- towards conversion charges and additional FAR charges for commercial use. The matter is under negotiation with tenants and the management is hopeful to recover the same. Further for the current year, the same is being contested with MCD and on finality of the same, the amount, if any, will be deposited from the amount recovered from the tenants.

8. Deferred Taxation

On a prudent and conservative basis, Deferred Tax Asset, due to timing differences, arising from Unabsorbed Depreciation, Business Loss and Provisions for Non Performing Assets have not been recognised in the absence of any certainty that sufficient future taxable income will be available in the foreseeable future against which the net Deferred Tax Assets can be realised.

9. Current Taxation:-

a) Provision for Income Tax for the year has been made after considering relief available under the Income Tax Act, 1961.

b) Income Tax assessments up to the financial year 2009-10 (Assessment Year 2010-2011) have been completed and there are no pending demands against the Company.

10. Segment information :-

The Company''s business activities predominantly relate to providing finance by way of Hire Purchase and Leasing Operations. Accordingly revenue from financing activities comprises the primary basis of segmental reporting. Hence segmental reporting as defined in Accounting Standard – 17 is not applicable.

11. Balance in parties accounts whether in debit or in credit are subject to confirmation.

12. Disclosure of details pertaining to related party transactions entered into during the year in terms of Accounting Standard -18 "Related Party Disclosures" issued by the Institute of Chartered Accountants of India:

a) List of Related Parties

(As identified and certified by the management)

i) Under Common Control

India Lease Development Limited, Jayabharat Credit Limited and Bahubali Services Limited. ii) Enterprises over which the key management personnel are able to exercise significant influence.

MGF Motors Private Limited, Kerala Cars Private Limited, Ram Prakash & Co.Private Limited and Grosvenor Estates Pvt.Limited.

iii) Key Management Personnel

Shri Rajiv Gupta, Smt Arti Gupta and Shri. Arun Mitter.

13. There is no amount due to the Micro Small and Medium Enterprises in terms of "The Micro Small and Medium Enterprises Development Act, 2006"

14. The assets and liabilities are classified between current and non current considering 12 months period as operating cycle. The Company has regrouped previous year figures wherever considered necessary.


Mar 31, 2012

Notes:-

a) Term Loan from Kotak Mahindra Bank Limited is secured by way of mortgage of one of company's properties and hypothecation of trade receivables including all present and future lease rentals and personal guarantee of two directors.

b) The principal of term loan is payable by way of monthly installments and the floating rate of interest is 15.30%. The principal amount of loan repayable in Financial Year 2012-13 is Rs. 167,400,000/-, 2013-14 Rs. 122,300,000/-, 2014-15 Rs. 83,400,000/- and in 2015-16 Rs. 36,100,000/- respectively.

c) Working capital loan is secured by way of first & exclusive equitable mortgage of one of the properties of the company and personnel guarantee of two Directors.

d) Working capital loan is repayable in 36 equal installments after 12 months of moratorium period. The rate of interest on working capital loan is 15.55%

e) Vehicle loan is secured against the hypothecation of vehicle

f) The principal of vehicle loan is payable by way of monthly installments and the rate of interest is 13%. The principal amount of loan repayable in financial year 2012-13 is Rs. 3,522,242/-, 2013-14, Rs. 3,931,732/-, 2014-15 Rs. 4,762,707/- and in 2015-16 Rs. 4,485,049/- respectively.

1.1 The Company has charged Rs. 903,675/- (previous year Rs. 3,531,078/-) to Statement of Profit & Loss for the year ended 31st March, 2012 towards Gratuity Liability as per Payment to Gratuity Act, 1972. The closing Gratuity liability(current & non current) as on 31st March, 2012 is Rs. 10,951,169/-( previous year Rs. 10,047,494/-).

2. CONTINGENT LIABILITIES: (Amount in Rs.)

Particulars 31.3.2012 31.3.2011

a) Guarantees given to Sales Tax and other authorities, on behalf 424,439 424,439 of the company (against pledge of fixed deposits)

b) Other disputed demands not acknowledged as debts

i) Electricity charges(BSES) 6,924,303 6,924,303



3. The Company continues to hold the certificate issued by Reserve Bank of India in Category "B" as Non-Accepting Deposits Non Banking Finance Company.

4. In terms of Notification No.RBI/2006-07/200/DNBS/PDCC No.85/03.02.089 dated December 6, 2006 for continuation of business of NBFI, under Section 45-1A of the RBI Act,1934 pending issuance of fresh certificate of registration, the company continues to correspond to the classification as per the certificate issued under the NBFCs norms.

5. In view of the Company's substantial holding in Jayabharat Credit Limited (JBCL) and to preserve Company's reputation and image, the Board of Directors of the Company had taken a conscious decision to give Inter-Corporate Deposit (ICD) to meet the contingency in repayment of public deposits and banks of JBCL. The outstanding amount of the ICD is Rs. 254,100,000 (Previous Year Rs. 137,575,000), will be settled once JBCL becomes a debt free company. However, the interest on the ICD is being recovered regularly.

6. Non Current Long Term Investments are to be valued at cost in terms of Accounting Standard-13 "Accounting for Investments" issued by the Institute of Chartered Accountants of India and as recommended by Reserve Bank of India's guidelines, subject to provision for diminution in value, other than temporary in nature. However, considering the long term nature and other related matters, investments in quoted companies amounting to Rs. 90,505,731 (Previous Year Rs.81,701,231) have been valued at cost and the temporary short fall of Rs.30,598,031 (Previous Year Rs.38,224,543) has not been provided for.

7. The Company could not comply with the Reserve Bank of India guidelines prescribed for Non Banking Financial Companies Prudential Norms (Reserve Bank) Directions, 1998 with regard to credit concentration exposure in respect of one company which have become in excess of prescribed limits.

8. The Company in one of the properties, on the demand raised during the year, by the Municipal Corporation of Delhi, has deposited Rs. 1,40,29,312/- towards conversion charges and additional FAR charges for commercial use. The matter is under negotiation with tenants and the management is hopeful to recover the same.

9. Deferred Taxation

On a prudent and conservative basis, Deferred Tax Asset, due to timing differences, arising from Unabsorbed Depreciation, Business Loss and Provisions for Non Performing Assets have not been recognised in the absence of any certainty that sufficient future taxable income will be available in the foreseeable future against which the net Deferred Tax Assets can be realised.

10. Current Taxation:-

a) Provision for Income Tax for the year has been made after considering reliefs available under the Income Tax Act, 1961.

b) Income Tax assessments up to the financial year 2008-2009 (Assessment Year 2009-2010) have been completed and there are no pending demands against the Company.

11. Segment information :-

The Company's business activities predominantly relate to providing finance by way of Hire Purchase and Leasing Operations. Accordingly revenue from financing activities comprises the primary basis of segmental reporting. Hence segmental reporting as defined in Accounting Standard - 17 is not applicable.

12. Balance in parties accounts whether in debit or in credit are subject to confirmation.

13. Disclosure of details pertaining to related party transactions entered into during the year in terms of Accounting Standard -18 "Related Party Disclosures" issued by the Institute of Chartered Accountants of India: a) List of Related Parties

(As identified and certified by the management)

i) Under Common Control

India Lease Development Limited, Jayabharat Credit Limited, Bahubali Services Limited, MGF Services Limited (amalgamated with India Lease Development Limited w.e.f. April 29, 2011) and Grossvenor Estates Pvt. Limited.

ii) Enterprises over which the key management personnel are able to exercise significant influence.

MGF Motors Private Limited, Capital Vehicle Sales (P) Ltd, Kerala Cars Private Limited, Columbia Holding Private Limited and Ram Prakash & Co. Private Limited.

iii) Key Management Personnel

Shri Rajiv Gupta, Smt Arti Gupta and Shri. Arun Mitter.

ii Directors Sitting Fees

Sundry Expenses include Rs. 80,000 (Previous Year Rs.85,000) paid towards Directors' Sitting Fees for attending Board Meetings. No Meeting Fee was paid for attending Committee Meetings.

ii) Directors Travelling Transport, Travelling and Motor Car Expenses include Rs.181,371 (Previous Year Rs.1,713,329) for Directors Travelling

14. There is no amount due to the Micro Small and Medium Enterprises in terms of "The Micro Small and Medium Enterprises Development Act, 2006"

15. The financial statements have been prepared in line with requirements of revised Schedule VI of the Companies Act 1956, as introduced by Ministry of Corporate Affairs, from the financial year ended March 31, 2012. Accordingly, the assets and liabilities are classified between current and non current considering 12 months period as operating cycle. The adoption of revised Schedule VI does not impact recognition and measurement principles followed for preparation of financial statements. However, it has significant impact on presentation and disclosures made in the financial statements. Consequently, the Company has reclassified previous year figures to conform to this year's classification.

 
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