Notes forming part of Financial Statements for the year ended March 31, 2015

1. Corporate Information:

Mega Corporation Limited (the company) is a public limited company domiciled in India and was incorporated under the provisions of the Indian Companies Act, 1956. Its Shares are listed on two Stock Exchanges in India. The Company is a RBI registered NBFC and has been engaged in Finance and Investments Business. The Company is also providing Air Charter Services and brsently owns one small passenger aircraft.

2. Significant Accounting Policies:

a) Basis of Accounting:

The financial statements of the company have been brpared in accordance with the Generally Accepted Accounting Principles in India (Indian GAAP), including the Accounting Standard notified under the relevant provisions of the Companies Act, 2013. The Company has brpared these financial statements to comply in all material respects with the Companies (Account) Rules, 2014 and the relevant provisions of the Companies Act, 2013.

The financial statements have been brpared on accrual basis under the historical cost convention. The accounting policies adopted in the brparation of these financial statements are consistent with those of brvious year.

b) Use of Estimates:

The brsentation of financial statements in conformity with the generally accepted accounting principles requires judgments, estimates and assumptions to be made that affect the reported amount of assets and liabilities, disclosure of contingent liabilities on the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Difference between the actual result and estimates are recognised in the period in which the results are known / materialised.

c) Tangible Fixed Assets:

Expenditure, which are of capital nature, are capitalised at acquisition cost, which comprises net purchases price (net of rebates and discounts), levies and any directly attributable cost of bringing the assets to its working condition for the intended use.

d) Debrciation on Tangible Fixed Assets:

Debrciation on Tangible Fixed Assets has been provided to the extent of debrciable amount on Written Down Value (WDV) Method as per useful life of the assets as brscribed in Schedule II to the Companies Act, 2013 except that Commercial Aircraft has been debrciated on the basis of Straight Line Method at the rates calculated on the basis of expected useful life of the said assets.

The debrciation charged for the assets which have been impaired are adjusted to allocate the assets revised carrying amount less its residual value, if any, over its remaining useful life. Debrciation on Tangible Fixed Assets disposed off during the year is provided on pro-data basis. Tangible Fixed Assets costing below Rs.5000/-fully debrciated in the year of acquisition.

e) Intangible Assets:

Intangible Assets are stated at cost of acquisition less accumulated amortisation. Amortisation is done on straight line basis. Software is amortized on straight line basis over the useful life of the asset or five years whichever is earlier.

f) Impairment of Assets:

The carrying value of intangible assets is reviewed for impairment at each Balance Sheet date to ascertain if there is any indication of impairment based on internal / external factors. An impairment loss is recognised whenever the carrying amount of an asset exceeds its recoverable amount. The recoverable amount is the greater of the asset's net selling price and value in use. In assessing value in use, the estimated future cash flows are discounted to their brsent value at the weighted average cost of capital.

After impairment, debrciation is provided on the revised carrying amount of the asset over its remaining useful life.

g) Provision, Contingent Liabilities and Contingent Assets:

Provisions involving substantial degree of estimation in measurement are recognized when there is a brsent obligation as a result of past events and it is probable that there will be an outflow of resources. Contingent liabilities are not recognized but are disclosed in the Financial Statements. Contingent Assets are neither recognised nor disclosed in the Financial Statements.

h) Investments:

Investments, which are readily realizable and intended to be held not more than one year from the date on which such was made, are classified as current investments. All other investments are classified as non-current investments. Non trade and unquoted non-current investments are stated at cost and quoted non-current Notes forming part of Financial Statements for the year ended March 31, 2015 investments at lower of cost or market value. Provision for diminution in the value of quoted non-current investment is made only if such a decline is other than temporary in the opinion of management.

Unquoted investments in subsidiaries / associates companies are non-current and valued at cost. No loss is recognized in the fall in their net worth, if any, unless there are permanent fall in their value.

i) Borrowing Costs:

Borrowing costs that are allocated to the acquisition or construction of qualifying assets are capitalised as part of cost of such assets. A qualifying asset is one that necessarily takes substantial period of time to get ready for intended use. All other borrowing costs are charged to revenue.

j) Foreign Currency Transactions:

All income and expenditure items are accounted for on the basis of exchange rate brvailing on the date of transaction. The net exchange difference arising from realization of foreign currency and transaction amount has been dealt with in the statement of profit and loss and capitalized where it relates to fixed assets. Current Assets and Current Liabilities in foreign currency are accounted for at the rate brvailing as on the date of Balance Sheet.

k) Employees Benefits:

The liability for Gratuity is provided on the basis of Valuation carried out at the end of each financial year internally by the Company.

Retirement benefits in the form of contribution to Provident Fund are charged to the Statement of Profit and Loss for the year when the contributions to the respective funds are due.

Leave Encashment Benefit is accounted for on basis of valuation made at the end of each financial year by the Company.

l) Taxation:

Tax expense comprises of current tax and deferred tax. Current tax is measured at the amount expected to be paid to the tax authorities, using the applicable tax rates. Deferred income tax reflect the current period timing differences between taxable income and accounting income for the period and reversal of timing differences of earlier years/period. Deferred tax assets are recognised only to the extent that there is a reasonable certainty that sufficient future income will be available except that deferred tax assets, in case there are unabsorbed debrciation or losses, are recognised if there is virtual certainty that sufficient future taxable income will be available to realise the same.

Deferred tax assets and liabilities are measured using the tax rates and tax law that have been enacted or substantively enacted by the Balance Sheet date

m) Earnings per Share

Basic earnings per share is calculated by dividing the net profit or loss for the year attributable to equity shareholders, by the weighted average number of equity shares outstanding during the year.

For the purpose of calculating diluted earnings per share, the net profit or loss for the year attributable to equity shareholders and weighted average number of shares outstanding during the year is adjusted for the effects of all dilutive potential equity shares.

n) Revenue Recognition:

The revenue and expenditure related to Air Charter Services and Financing Services are accounted ongoing concern basis.

Interest income / expenses are recognised using the time proportion method based on the rates implicit in the transaction.

Other receipts / incomes are recognised when the right to receive the same is established, i.e. accrual basis. 

2. Capital Commitments:

Estimated amount of contracts remaining to be executed on Capital Account (Net of Advances) and not provided for: NIL (Previous Year: NIL). 

3. The Board has certified that all the income accrued to the Company has been taken into consideration and belong entirely and exclusively to the business of the Company.

4. In the opinion of Board of Directors the "Current / Non-Current Assets" have a value on realisation in the ordinary course of business at least equal to the amount at which they are stated in the Balance Sheet, except the amount of Insurance Claim Receivable out came of which shall depend on acceptance of claim by the Insurer.

5. Balances of Debtors, Creditors, Loans and Advances and Unsecured Loans are subject to confirmation and reconciliation adjustment, if any.

6. In the absence of receipt of information regarding small scale industrial status from the parties, the details of names of Small Scale Industrial Undertakings to which the company owe any sum together with interest outstanding for more than 30 days could not be ascertained.

7. In pursuant to the enactment of Companies Act 2013, the company has applied the estimated useful lives as specified in Schedule II, except in case of Commercial Aircraft. Accordingly the unamortised carrying value is being debrciated / amortised over the revised/ remaining useful lives. The written down value of Fixed Assets whose lives have been expired as at 1st April, 2014 have been adjusted up to debrciable value, in the opening balance of Profit and Loss Account amounting to Rs. 28,395/-.

8. Change in Estimation of Residual Value and Life of Tangible Assets:

The Company had revised its estimated residual value and useful life in the case of Commercial Aircraft with effect from first day of the financial year. Due to the change in estimation the debrciation for the year has been lower by Rs. 64,76,620/-. 

If there were no change in estimation, then Profit Before Tax, Profit After Tax and Deferred Tax Assets would be Rs. (63,69,575/-), Rs. (39,46,006/-) and Rs. 94,29,615/- respectively in place of 1,07,044/-, 5,29,338/- and 74,28,340/-.

9. Previous year figures have been regrouped, reworked and reclassified wherever necessary. As per our Report of even date 

For Sipani & Associates

Chartered Accountants

Registration No.: 007712N

Sd/-(VIJAY SIPANI)

Proprietor

M. No. 083850

For and on behalf of the Board 

Sd/-Surendra Chhalani Director & CFO DIN : 00002747

Sd/-Shurab Kumar DirectorDIN : 02034499

Sd/-Urvashi Aggarwal Company Secretary M. No. 34872 

Place: Delhi

Dated: 29-05-2015