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Notes to Accounts of Sastasundar Ventures Ltd.

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.


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.


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.


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.


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

 
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