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Notes to Accounts of HB Leasing & Finance Co Ltd.

Mar 31, 2015

1. CONTINGENT LIABILITIES AND COMMITMENTS (TO THE EXTENT NOT PROVIDED FOR)

(a) Income Tax demand disputed Rs. 17,46,60,436/-(Previous year Rs. 13,43,03,760/-) against which appeals are pending with appropriate authorities.

(b) Claims against the company not acknowledged as debts Rs. 1,58,02,781/- (Previous Year Rs. 1,58,02,781/-)

(c ) Guarantees given on behalf of Related Parties:- NIL/- (Previous Year Rs. 7,00,00,000/-)

2. RELATED PARTY TRANSACTIONS

2.1 List of related parties with whom transactions have taken place and relationship:

a) Companies under direct or indirect common influence:

1. HB Securities Ltd.

2. HB Estate Developers Ltd.

3. RRB Master securities Delhi Ltd.

b) Persons having direct/Indirect significant influence 1. Sh. Lalit Bhasin

c) Key Managerial Personnel

1. Sh. C.P. Singh,Chief Financial Officer

2. Swati Vaish,Company Secretary (w.e.f. 19.08.2014)

b) Minimum lease payments recognised in the statement of profit & loss account during the year ended 31st March 2015 is Rs. 3,22,524/- (Previous Year Rs. 3,22,524/-).

c) General description of the lease arrangement.

The lease is for an initial period of 3 years, which may be renewal for further period as may be mutually agreed upon.

Restrictions imposed by lease arrangement:- - The Lessee shall not sublet or otherwise part with possession of a part or whole of the premise without the previous consent in writing of the lessor.

- The lessee shall use the premises for commercial purposes only.

3. Due to Micro, Small and Medium Enterprises

To the extent information available with the company,it has no dues to the Micro,Small and medium enterprises as at 31st March, 2015 and 31st March, 2014.

4. During the year,the company has revised depreciation rates on fixed assets as per the useful life specified in Schedule II to the Companies Act, 2013. Based on the Current estimates, depreciation of Rs 1,66,773/- on account of assets whose useful life has already exhausted as on April 1, 2014 has been added to the depreciation for the year ended March 31,2015.

5. Litigation

a) The Company is in appeal in respect of various income tax matters.The Contingent liability in respect thereof is disclosed in note no. 19 (a). Besides,in respect of appeals decided in favour of the company,the department is in appeals in certain cases.

b) In respect of block assessment for the period 01.04.1987 to 07.08.1997 the assessing officer,has made an assessment order determining demand of Rs. 15,66,41,461/-. The Company has filed application before Income Tax Settlement Commission wherein, the liability admitted and paid was Rs. 9,00,000/-only.In respect of certain directions passed by one member of Settlement commission, the Company has challenged the legality of such directions before the Hon'ble Delhi High Court which has sought reply from the Income Tax Department and,in the meantime, stayed further proceedings before the Settlement commision.

c) A party has filed a suit for claim of Rs. 1,58,02,718/- with future interest against the company in respect of certain leasing and hire purchases agreements pertaining to more than 20 years back. The Company does not have acknowledge any debt.

In addition,the company is subject to legal proceedings and claims,which have arisen in the ordinary course of business.The Company's management does not reasonably expect that the above legal claims and proceedings, when ultimately concluded and decided will have a meterial and adverse effect on the company's results of operations or financial statements.

6. The Company did not have any long term contracts including derivative contracts for which there were any material foreseeable losses.

7. The Previous year figures have been regrouped/reclassified,wherever necessary to confirm to the Current Year's presentation


Mar 31, 2014

* Issued Share capital of the Company has only one class of shares referred to as equity shares having Par value of Rs. 10/. Each holder of Equity Shares is entitled to One vote per share.

* In the event of the Liquidation of the company, the holder of equity shares will be entitled to receive any of the 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.

1. Note: Provision for Sub-Standard and doubtful assets has been sepretely shown in Note no. 6 (Short term Provisions) instead of netting it from the value of asset. This is being done as required in the Non Banking Financial (Non-Deposit Accepting or Holding) Companies Prudential Norms(Reserve Bank) Directions 2007

2. CONTINGENT LIABILITIES AND COMMITMENTS (TO THE EXTENT NOT PROVIDED FOR)

(a) Income Tax demand disputed Rs. 13,43,03,760/-(Previous year Rs. 13,43,03,760/-) against which appeals are pending with appropriate authorities.

(b) Claims against the company not acknowledged as debts Rs. 1,58,02,781/- (Previous Year Rs. 1,58,02,781/-)

(c) Guarantees given on behalf of Related Parties:- Rs. 700,00,000/- (Previous Year Rs. 7,00,00,000/-)

In the Opinion of the Management,the aforesaid guarantees had been given in view of overall long term business involvement/relation of the company with the aforesaid companies and the giving of aforesaid guarantees will not have any prejudicial impact on the company.

3. SEGMENT REPORTING

In the opinion of Management there are no separate reportable segments as per Accounting Standard Segment reporting (AS-17).

4. a) Minimum lease payments recognised in the statement of profit & loss account during the year ended 31st March, 2014 is Rs. 3,22,524/- (Previous Year Rs. 3,22,524/-).

b) General description of the lease arrangement.

The lease is for an initial period of 3 years, which may be renewal for further period as may be mutually agreed upon.

Restrictions imposed by lease arrangement:-

* The Lessee shall not sublet or otherwise part with possession of a part or whole of the premise without the previous consent in writing of the lessor.

* The lessee shall use the premises for commercial purposes only.

5. Due to Micro, Small and Medium Enterprises

To the extent information available with the company, it has no dues to the Micro, Small and Medium enterprises as at 31st March, 2014 and 31st March, 2013.


Mar 31, 2013

1 CONTINGENT LIABILITIES AND COMMITMENTS (TO THE EXTENT NOT PROVIDED FOR)

(a) Income Ta x demand disputed Rs. 13,43,03,760/- (Previous year Rs. 13,13,42,090/-) against which appeals are pending with appropriate authorities.

(b) Claims against the company not acknowledged as debts Rs. 1,58,02,781/- (Previous Year Rs. 1,58,02,781/-)

(c ) Guarantees given on behalf of Related Parties:- Rs. 7,00,00,000/- (Previous Year Rs. 7,00,00,000/-)

In the Opinion of the Management,the aforesaid guarantees had been given in view of overall long term business involvement/relation of the company with the aforesaid companies and the giving of aforesaid guarantees will not have any prejudicial impact on the company.

2 RELATED PARTY TRANSACTIONS

2.1 List of related parties with whom transactions have taken place and relationship:

a) Companies under direct or indirect common infuence:

1. HB Securities Ltd. 2. HB Estate Developers Ltd.

3. RRB Master securities Delhi Ltd.

b) Persons having direct/Indirect signifcant infuence 1. Sh.Lalit Bhasin

3 Disclosure pursuant to Accounting Standard AS-19 for Leases: - Operating Lease

a) Particulars of the minimum lease payments under Operating Lease:- Not Later than One year Rs. 3,22,524/- (Previous Year Rs. 3,16,608/-) Later than one year but not Rs. NIL/- (Previous Year Rs. NIL/-)

Later than fve years

Later than fve years Rs. NIL/- (Previous Year Rs. NIL/-)

b) Minimum lease payments recognised in the statement of proft & loss account during the year ended 31st March 2013 is Rs. 3,22,524/- (Previous Year Rs. 3,16,608/-).

c) General description of the lease arrangement.

The lease is for an initial period of 3 years, which may be renewal for further period as may be mutually agreed upon.

Restrictions imposed by lease arrangement:- – The Lessee shall not sublet or otherwise part with possession of a part or whole of the premise without the previous consent in writing of the lessor.

– The lessee shall use the premises for commercial purposes only.

4 Due to Micro, Small and Medium Enterprises

To the extent information available with the company,it has no dues to the Micro, Small and medium enterprises as at 31st March, 2013 and 31st March, 2012.


Mar 31, 2012

The Previous year figures have been regrouped/reclassifed,wherever necessary to conform to the Current Year's presentation

— Issued Share capital of the Company has only one class of shares referred to as equity shares having Par value of Rs. 10/. Each holder of Equity Shares is entitled to One vote per share.

— In the event of the Liquidation of the company, the holder of equity shares will be entitled to receive any of the 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.

(*) Created by way of transfer of specified percentage of profits as per section 45IC of Reserve Bank of India (Amendment) Act,1997.Appropriation from Reserves shall be for the purposes as may be specified by Reserve Bank of India.

(**) Created in earlier years out of Profit and Loss account as per then prevailing provisions of Income tax act.

1.1 In the opinion of the Management, no Provision is required to be made for diminution amounting to Rs. 163651514 (Previous Year Rs. 159420723/-) in the value of Long term/Non current investments as the same is considered to be temporary.

*Includes to Related Party HB Estate Developers Ltd. Rs. 1,15,00,000/- (Previous year Rs. 1,15,00,000/-)

Note: Provision for Sub- Standard and doubtful assets has been separately shown in Note no. 5 (Short term Provisions) instead of netting it from the value of asset. This is being done as required in the Non Banking Financial (Non-Deposit Accepting or Holding) Companies Prudential Norms (Reserve Bank) Directions 2007.

Note: Provision for Sub- Standard and doubtful assets has been separately shown in Note no. 5 (Short term Provisions) instead of netting it from the value of asset. This is being done as required in the Non Banking Financial (Non-Deposit Accepting or Holding) Companies Prudential Norms (Reserve Bank) Directions 2007.

2 CONTINGENT LIABILITIES AND COMMITMENTS (TO THE EXTENT NOT PROVIDED FOR)

(a) Income Tax demand disputed Rs. 13,13,42,090/- (Previous year Rs. 68,52,164/-) against which appeals are pending with appropriate authorities.

(b) Claims against the company not acknowledged as debts Rs. 1,58,02,781/- (Previous Year Rs. 1,58,02,781/-)

(c ) Guarantees given on behalf of Related Parties:- Rs. 7,00,00,000/- (Previous Year Rs. 22,00,00,000/-)

In the Opinion of the Management, the aforesaid guarantees had been given in view of overall long term business involvement/relation of the company with the aforesaid companies and the giving of aforesaid guarantees will not have any prejudicial impact on the company.

3 RELATED PARTY TRANSACTIONS

3.1 List of related parties with whom transactions have taken place and relationship:

a) Companies under direct or indirect common influence:

1. HB Securities Ltd.

2. HB Estate Developers Ltd.

3. RRB Master securities Delhi Ltd.

4. RRB Securities Ltd.

b) Persons having direct/Indirect significant influence

1. Sh.Lalit Bhasin

4 SEGMENT REPORTING

In the opinion of Management there are no separate reportable segments as per Accounting Standard Segment reporting (AS-17).

5 Disclosure pursuant to Accounting Standard AS-19 for Leases: - Operating Lease

a) Particulars of the minimum lease payments under Operating Lease:-

Not Later than One year Rs. 3,16,608/- (Previous Year Rs. 3,16,608/-)

Later than one year but not Rs. NIL/- (Previous Year Rs. NIL/-)

Later than five years

Later than five years Rs. NIL/- (Previous Year Rs. NIL/-)

b) Minimum lease payments recognised in the statement of profit & loss account during the year ended 31st March 2012 is Rs. 3,16,608/- (Previous Year Rs. 3,16,608/-).

c) General description of the lease arrangement.

The lease is for an initial period of 3 years, which may be renewal for further period as may be mutually agreed upon.

Restrictions imposed by lease arrangement:- – The Lessee shall not sublet or otherwise part with possession of a part or whole of the premise without the previous consent in writing of the lessor.

– The lessee shall use the premises for commercial purposes only.

6 Due to Micro,Small and Medium Enterprises

To the extent information available with the company, it has no dues to the Micro,Small and medium enterprises as at 31st March, 2012 and 31st March,2011.

7 Disclosure relating to outstanding derivative exposures in securities :-

a) Shares/securities having book value of Rs. 174046870 /-(Previous year Rs.144492184/-) were given as margin at the year end.

b) Detail of Open Interest in Equity Stock Futures Contracts as at the year-end 31.03.2012


Mar 31, 2011

1. Contingent Liabilities not provided for

Particulars Current Year Previous Year

(a) Income tax demands disputed including interest etc. against which appeals are pending with appropriate authorities 68,52,164/- 68,52,164/-

(b) Claims against the Company not acknowledged as debts 1,58,02,781/- 1,58,02,781/-

(c) *Guarantee issued on behalf of – 15,00,00,000/- Nil HB Securities Ltd. – a company under the same management.

RRB Master Securities Delhi Ltd.7,00,00,000/- Nil

* Subsequent to the year, HB Securities Ltd. has written to their bank for withdrawal of Guarantee as the same was no longer required by them. Accordingly the company has also written to the bank of HB Securities Ltd. for withdrawal of Guarantee. The aforesaid guaranties were given in view of overall long terms business involvement/relation of the company with them. In the opinion of the management, the giving of aforesaid guaranties will not have any prejudicial impact on the company.

2. In the opinion of the management, current assets, loans and advances are approximately of the value stated if realised in the ordinarily course of business.

3. In the opinion of management, there are no separate reportable segments as per accounting standard – segment reporting (AS-17).

4. Disclosure of related party transaction in accordance with Accounting Standard (AS-18) ‘Related Party Disclosures' is as per annexure attached.

5. Operating Lease (Disclosure pursuant to Accounting Standard AS-19 for Leases)

a) Particulars of the minimum lease payments under Operating Lease :- 1. Not Later than One year Rs. 3,16,608/- (Previous year Rs. 3,16,608/-)

ii Later than one year, but not later than five years Rs. Nil

(Previous year Rs. Nil)

iii. Later than five years Rs. Nil

(Previous year Rs. Nil)

b) Minimum lease payments recognised in the statement of profit & loss account during the period ended 31st March 2011 is Rs. 3,16,608/- (Previous year Rs. 3,16,608/- )

c) General description of the lease arrangement.

– The Lessee shall not sublet or otherwise part with possession of a part or whole of the premise without the previous consent in writing of the lessor.

– The lessee shall use the premises for commercial purposes only. – The lease can be terminated by the lessee by serving one month notice to the lessor.

6. In the opinion of management, no provisions is required to be made for diminution amounting to Rs. 15,94,20,723/- (Previous year : Rs. 14,75,05,806/- ) in the value of long term investments as the same is considered to be temporary.

7. a) To the extent information available with the company, Sundry Creditorsinclude Nil,

(Previous year Nil) due to Small Scale Industrial Undertaking. b) The company has not received any information from suppliers regarding their status under the Micro, Small and Medium Enterprises Development Act, 2006. To the extent information available with the company, the company does not owe any sum including interest required to be disclosed under the said Act.

8. Disclosure with regard to outstanding derivative exposure in securities :- a) Cash Margin amounting to Rs. Nil (Previous year Rs. Nil) on equity derivative instruments contracts has been paid and also Shares/Securities costing Rs. 14,44,92,184/- were given as margin as at the year end (Previous year – Rs. 4,82,71,858/- )

9. The previous year figures have been regrouped/rearranged wherever considered necessary.


Mar 31, 2010

1. Contingent Liabilities not provided for

Particulars Current Year Previous Year

(a) Income tax demands disputed including interest etc. against which appeals are pending with appropriate authorities 68,52,164/- 1,36,79,205/-

(b) Claims against the Company not acknowledged as debts 1,58,02,781/- 1,58,02,781/-

2. In the opinion of the management, current assets, loans and advances are approximately of the value stated if realised in the ordinarily course of business.

3. In the opinion of management, there are no separate reportable segments as per accounting standard – segment reporting (AS-17).

4. Disclosure of related party transaction in accordance with Accounting Standard (AS-18) ‘Related Party Disclosures’ is as per annexure attached.

6. Operating Lease (Disclosure pursuant to Accounting Standard AS-19 for Leases)

a) Particulars of the minimum lease payments under Operating Lease :-

1. Not Later than One year Rs.3,16,608/-

(Previous year Rs. 3,16,605/-)

ii Later than one year, but not later than five years Rs. Nil

(Previous year Rs. Nil)

iii. Later than five years Rs. Nil

(Previous year Nil)

b) Minimum lease payments recognised in the statement of profit & loss account during the period ended 31st March 2010 is Rs. 3,16,608/- (Previous year Rs. 3,22,031/- )

c) General description of the lease arrangement.

- The Lessee shall not sublet or otherwise part with possession of a part or whole of the premise without the previous consent in writing of the lessor.

- The lessee shall use the premises for commercial purposes only.

- The lease can be terminated by the lessee by serving one month notice to the lessor.

7. Disclosure pursuant to Accounting Standard - 15

a) The company has, adjusted Rs.Nil (Previous Year Rs.86,587/-) towards the earlier years effect of defined benefit obligation in respect of employee benefits in the Profit & Loss Account below the line.

8. In the opinion of management, no provisions is required to be made for diminution amounting to Rs.14,75,05,806/- (Previous year : Rs.16,14,09,556/- ) in the value of long term investments as the same is considered to be temporary.

9. Miscellaneous Income includes Rs.18,877/- (Previous Year Rs.Nil) interest income on FDR (TDS Rs.1,888/- (Previous Year Rs.Nil ) and Rs.2,47,000/- (Previous Year NIL) being the recovery of certain shares earlier written off.

10. a) To the extent information available with the company, Sundry Creditors include Nil, (Previous year Nil) due to Small Scale Industrial Undertaking.

b) The company has not received any information from suppliers regarding their status under the Micro, Small and Medium Enterprises Development Act, 2006. To the extent information available with the company, the company does not owe any sum including interest required to be disclosed under the said Act.

11. Disclosure pursuant to Guidance Note issued by The Institute of Chartered Accountants of India on ‘Accounting for Equity Index & Equity Stock Futures & Options’:-

a) Cash Margin amounting to Rs.Nil (Previous year Rs.Nil) on equity derivative instruments contracts has been paid and also Shares/Securities costing Rs.4,82,71,858/- were given as margin as at the year end (Previous year - Rs.4,81,31,858/-)

12. The previous year figures have been regrouped/rearranged wherever considered necessary.

13. Additional information pursuant to Non-Banking Financial (Non-Deposit Accepting or Holding) Companies Prudential Norms (Reserve Bank) Directions, 2007 is annexed.

14. Additional information pursuant to Part IV of Schedule VI to the Companies Act, 1956 is annexed.

15. Schedule A to J form an integral part of our accounts.

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