Mar 31, 2016
COMPANY OVER VIEW
The Company is public limited company incorporated and domiciled in India having its registered office at Gurgaon,India. The Company is a non-banking finance company (without accepting or holding public deposits) registered with Reserve Bank of India. The equity shares of the Company are listed at Bombay Stock Exchange and National Stock Exchange in India.
1. SIGNIFICANT ACCOUNTING POLICIES
1.1 BASIS OF PREPRATION OF FINANCIAL STATEMENTS: -
These financial statements are prepared in accordance with Indian Generally Accepted Accounting Principles (GAAP) under the historical cost convention on the accrual basis. GAAP comprises mandatory accounting standards as prescribed under Section 133 of the Companies Act,2013 (âActâ) read with Rule7 of the Companies (Accounts) Rules,2014 the provisions of the Act (to the extent notified),guidelines issued by Reserve Bank of India and guidelines issued by the Securities and Exchange Board of India (SEBI) . Accounting policies have been consistently applied except where a newly issued accounting standard is initially adopted or are vision to an existing accounting standard requires a change in the accounting policy hitherto in use.
1.2 USE OF ESTIMATES
The preparation of financial statements in conformity with generally accepted accounting principles (GAAP) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosures of contingent liabilities on the date of financial statements and reported amounts of revenue and expenses for that year. Actual results could differ from these estimates. Any revision to accounting estimates is recognized prospectively in current and future periods.
1.3 REVENUE RECOGNITION
1.3.1 All Income & Expenditure are accounted for on accrual basis.
1.3.2 Shares/Securities are capitalized at cost inclusive of brokerage, Service Tax, Education Cess.
1.3.3 Provision for loss in respect of Open Equity Derivative Instrument as at the Balance Sheet date is made Index-wise/Scrip-wise. As a matter of prudence, any anticipated profit is ignored.
1.4 FIXED ASSETS
Fixed Assets are stated at cost less depreciation.
1.5 DEPRECIATION
Depreciation on tangible assets is provided on Straight Line method over the useful life of assets in the manner specified in Schedule II to the Companies Act, 2013.
1.6 INVESTMENTS
1.6.1 Investments are classified into Current Investments and Noncurrent/Long Term Investments.
1.6.2 Current Investments are valued at lower of cost or fair market value on category wise basis. Noncurrent/Long Term Investments are valued at cost less other than temporary diminution, if any, on scrip wise basis. Provision for reduction/diminution in the value of Investments and reversal of such reduction/ diminution are included in the Profit & Loss Account. For the purpose of disclosure and presentation in the financial statements, and in compliance with âNon-Systemically Important Non-Banking Financial (Non Deposit Accepting or Holding) Companies Prudential Norms (Reserve Bank) Directions,2015: -
(a) on the assets side, investments are shown at cost;
(b) the diminution/depreciation is shown correspondingly under the head âProvisionsâ(Short term/Long term) in the liabilities side in the Balance Sheet without showing it as deduction from the value of Investments.
1.6.3 Cost of investments is computed using the Weighted Average Method.
1.7 EMPLOYEE BENEFITS
1.7.1 Employee Benefits are recognized/accounted for on the basis of revised AS-15 detailed as under :-
1.7.2 Short Term Employee benefits are recognized as expense at the undiscounted amount in the Statement of Profit & Loss of the year in which they are incurred.
1.7.3 Employee benefits under defined contribution plans comprise of contribution to Provident Fund and Superannuation. Contributions to Provident Fund are deposited with appropriate authorities and charged to Statement of Profit & Loss. Contribution to Superannuation are funded with Life Insurance Corporation of India.
1.7.4 Employee Benefits under defined benefit plans comprise of gratuity and leave encashment which are accounted for as at the yearend based on actuarial valuation by following the Projected Unit Credit (PUC) method. Liability for gratuity is funded with Life Insurance Corporation of India.
1.7.5 Termination benefits are recognized as an Expense as and when incurred.
1.7.6 The actuarial gains and losses arising during the year are recognized in the Statement of Profit & Loss of the year without resorting to any amortization.
1.8 TAXATION
Tax expenses for the year comprises of Current tax and deferred tax charge or credit. The deferred Tax Asset and deferred Tax Liability is calculated by applying tax rates and tax laws that have been enacted or substantially enacted by the Balance Sheet date. Deferred Tax assets arising mainly on account of brought forward losses and unabsorbed depreciation under tax law are recognized only if there is virtual certainty of its realization. Other deferred tax assets are recognized only to the extent there is a reasonable certainty of realization in future. Deferred Tax Assets/Liabilities are reviewed at each balance sheet date based on development during the year, further future expectations and available case laws to reassess realization/ liabilities.
1.9 IMPAIRMENT OF FIXED ASSETS
Consideration is given at each balance sheet date to determine whether there is any indication of impairment of the carrying amount of the Companyâs Fixed Assets. If any indication exists, an assetâs recoverable amount is estimated. An impairment loss is recognized whenever the carrying amount of an asset exceeds its recoverable amount. The recoverable amount is the greater of the net selling price and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value based on an appropriate discount factor.
Reversal of impairment losses recognized in prior years is recorded when there is an indication that the impairment losses recognized for the asset no longer exist or have decreased. However, the increase in carrying amount of an asset due to reversal of an impairment loss is recognized to the extent it does not exceed the carrying amount that would have been determined (net of depreciation) had no impairment loss been recognized for the assets in prior years.
1.10 CONTINGENCIES:
The company creates a provision when there is present obligation as result of a past event that probably requires an outflow of resources and a reliable estimate can be made of the amount of the obligation. A disclosure for a contingent liability is made when there is a possible obligation or a present obligation that may, but probably will not, requires an outflow of resources. When there is a possible obligation or a present obligation in respect of which the likelihood of outflow of resources is remote, no provision or disclosure is made.
- Issued Share capital of the Company has only one class of shares referred to as equity shares having Par value ofRs.10/. Each holder of Equity Shares is entitled to One vote per share.
- Reconciliation of the number of shares outstanding and Amount of Share Capital as on 31st March, 2016 & 31st March, 2015 is as under:
- The dividend Proposed, if any, by the Board of Directors is subject to approval of the Shareholders in the ensuing Annual General Meeting.
- 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.
The Company, being an Investment and Finance company, the Income from Investment and
Finance activities are Operational Income.
(1) Profit/(Loss) on Sale/Disposal of Investments includes Loss ofRs.3,53,496/- (Previous Year LossRs.68,51,242/-) on Current Investments and Loss ofRs.1,19,91,369/- (Previous Year GainRs.1,76,04,958/-) on Non current/Long Term Investments.
(2) Provision for diminution in value of Investments written back includeRs.79,99,176/- provision written back (previous yearRs.3,55,94,153/-written back) in respect of Non Current/Long Term Investments andRs.25,95,407/- provision made (Previous Year provision madeRs.8,56,779/-) in respect of Current Investments.
(3) Dividend Income includesRs.43,46,615/-(Previous YearRs.1,52,17,207/-) on Long Term/ Noncurrent Investments andRs.56,229/-(Previous yearRs.4,54,869/-) on Current Investments.
4.. CONTINGENT LIABILITIES AND COMMITMENTS (TO THE EXTENT NOT PROVIDED FOR) CONTINGENT LIABILITIES:
5. Income Tax demand disputedRs.79,32,954/-(Previous yearRs.76,64,464/-) against which appeals are pending with appropriate authorities and in respect of which the management is confident that appeals will be decided in favour of the company.
6. QUANTITATIVE DETAILS
Quantitative information in respect of Investments in securities:
7. NON CURRENT/LONG TERM INVESTMENTS EQUITY INSTRUMENTS
8. RELATED PARTY TRANSACTIONS
9.1 List of related parties with whom transactions have taken place and relationship:
10. Subsidiaries.
11. Mount Finance Limited
12. Key Managerial Personnel
13. Shri Vijay Sood, Managing Director
14. Shri J.M.L.Suri, Executive Director
15. Shri Anil Kumar Mittal, Company Secretary
16. Shri Mahesh Kumar Gupta, Chief Financial Officer
17. Person having control/significant influence /major shareholders 1. Shri Lalit Bhasin
18. Enterprises over which control/significant influence exist of the relatives of persons mentioned in(c ) above :-
19.. RRB Master Securities Delhi Ltd.
20. Enterprises under direct or indirect common control/significant influence:
21.. HB Portfolio Ltd.
22. HB Estate Developers Ltd.
23. HB Securities Ltd.(Subsidiary of HB Portfolio Ltd.)
24. SEGMENT REPORTING
In the opinion of Management there are no separate reportable segments as per Accounting Standard Segment reporting (AS-17).
25. Disclosure pursuant to Accounting Standard AS-19 for Leases: -Operating Lease
26. Particulars of the minimum lease payments under Operating Lease:-
Not Later than One year Rs.12,44,124/- (Previous YearRs.9,67,692/-)
Later than one year but not Later than five years Rs.12,65,624/- (Previous YearRs.9,67,692/-)
Later than five years Rs. Nil (Previous YearRs.NIL)
Mar 31, 2015
1. COMPANY OVER VIEW
The Company is public limited company incorporated and domiciled in
India having its registered office at Gurgaon,India. The Company is a
non-banking finance company (without accepting or holding public
deposits) registered with Reserve Bank of India. The equity shares of
the Company are listed at Bombay Stock Exchange and National Stock
Exchange in India.
2. Shares Costing Rs. Nil (Previous Year Rs. 5,37,53,008/-) were Lying
Pledged / Given as Margin as at the Year end.
3. As at the year end,based on the last traded price on the stock
exchange,there is diminution amounting to Rs. 16,68,52,614/- (Previous
Year Rs. 26,11,74,159/-) in the Value of Long term/Non current
Investment in DCM Shriram Industries Ltd. However,in the opinion of
management the traded price on the exchange does not reflect its fair
value in view of very thin trading volume on the exchange. Further in
view of various factors such as significant stake,strategic long term
investments,breakup/fair value evidenced by the investee company's
balance sheet and various other factors,in the opinion of management,no
provision is required to be made of the aforesaid amount of diminution
calculated solely on the basis of last traded price. In the opinion of
management,the valuation of investment at cost is in accordance with
the accounting standard (AS-13).
4. The Company's Investments in DCM Shriram Industries exceeds the
exposure norms as Specified in erstwhile "Non-Banking (Non Deposit
Accepting or Holding ) Companies Prudential Norms (Reserve Bank)
Directions 2007".The Reserve Bank of India had granted extension of
time till March 31,2015 for compliance with the exposure norms. The
Company has vide letter dated March 26.2015 made application to Reserve
Bank of India for further extension of time for making compliance with
the exposure norms. The Reserve Bank of India vide notification dated
March 27.2015 has issued revised prudential norms directions in place
aforesaid directions of 2007.Vide E-mail communication dated 15.04.2015
Reserve Bank of India has intimated to the Company that in view of RBI
Circular DRBR (PD) CC.No. 002/03.10.001/2014-15 dated November 10,2014
regarding 'Revised Regulatory Framework for NBFC's and notification
dated March 27.2015 the company, being an NBFCs-ND with asset size of
less than ' 500 crores, is exempted from the requirement of complying
with credit concentration norms.
5. CONTINGENT LIABILITIES AND COMMITMENTS (TO THE EXTENT NOT PROVIDED
FOR) CONTINGENT LIABILITIES:
(a) Income Tax demand disputed Rs. 76,64,464/-(Previous year Rs.
77,92,043/-) against which appeals are pending with appropriate
authorities and in respect of which the management is confident that
appeals will be decided in favour of the company.
(b) Guarantees given on behalf of Related Parties:- Rs. Nil (Previous
Year Rs. 7,00,00,000/-)
6. QUANTITATIVE DETAILS
Quantitative information in respect of Investments in securities:
7. RELATED PARTY TRANSACTIONS
7.1 List of related parties with whom transactions have taken place
and relationship:
a) Subsidiaries.
1. Mount Finance Limited
b) Key Managerial Personnel
1. Shri Vijay Sood, Managing Director
2. Shri J.M.L.Suri, Executive Director
3. Shri Anil Kumar Mittal, Company Secretary
4. Shri Mahesh Kumar Gupta, Chief Financial Officer
c) Person having control/significant influence /major shareholders
1.Shri Lalit Bhasin
d) Associate
1. Pisces Portfolios Private Limited (Erstwhile Associate)
2. Taurus Asset Management Co.Ltd.
e) Enterprises over which control/significant influence exist of the
relatives of persons mentioned in (c) above :-
1. RRB Master Securities Delhi Ltd.
f) Enterprises under direct or indirect common control/significant
influence:
1. HB Portfolio Ltd.
2. HB Estate Developers Ltd.
3. HB Securities Ltd.(Subsidiary of HB Portfolio Ltd.)
4. RRB Securities Ltd.
5. RRB Masterholdings Ltd. (Subsidiary of RRB Securities Ltd.)
8. SEGMENT REPORTING
In the opinion of Management there are no separate reportable segments
as per Accounting Standard Segment reporting (AS-17).
9. 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. 9,67,692/- (Previous Year
Rs. 12,16,092/-)
Later than one year but not Rs. 9,67,692/- (Previous Year
Rs. 19,35,384/-)
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 2015 is Rs. 13,40,292/-
(Previous Year Rs. 13,40,292/-).
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.
10. 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.
11. Disclosure pursuant to Accounting Standard AS-22 for accounting
for taxes on Income: -
The company is having brought forward losses under the Income Tax Act.
In the absence of virtual as well as reasonable certainty of the
realization and on the consideration of prudence, credit for Deferred
Tax Assets has not been recognised to comply with Accounting Standard
AS-22.
12. Disclosure relating to outstanding derivative exposures in
securities :-
a) Cash Margin amounting to Rs. Nil (Rs.Nil) on Equity Derivative
instruments contracts has been paid and outstanding as at the end of
previous year. However, shares having book value of Rs. Nil (Previous
year Rs. 11,91,000/-) Market Value Rs. Nil(Previous Year Rs.
80,55,000/-) were given as margin at the year end.
13. 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.
14,51,667/- on account of assets whose useful life has already
exhaushed as on April 1,2014 has been added to the depreciation for the
year ended March 31, 2015.
Due to aforesaid revision in depreciation rates,depreciation for the
year as charged in the Profit & Loss account is higher by Rs.
9,98,826/-.
14. Litigation
The Company is in appeal in respect of various income tax matters. The
Contingent liability in respect there 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.
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.
15. The Company did not have any long term contracts including
derivative contracts for which there were any material foreseeable
losses.
16. The Previous year figures have been regrouped/reclassified,
wherever necessary to conform to the Current Year's presentation.
Mar 31, 2014
1.1 As at the year end,based on the last traded price on the stock
exchange,there is diminution amounting to Rs. 26,11,74,159/- (Previous
Year Rs. 32,18,09,439/-) in the Value of Long term/Non current Investment
in DCM Shriram Industries Ltd. However, in the opinion of management
the traded price on the exchange does not reflect its fair value in
view of very thin trading volume on the exchange. Further in view of
various factors such as significant stake,strategic long term
investments,breakup/fair value evidenced by the investee company''s
balance sheet and various other factors,in the opinion of management,no
provision is required to be made of the aforesaid amount of diminution
calculated solely on the basis of last traded price. In the opinion of
management,the valuation of investment at cost is in accordance with
the accounting standard (AS-13).
The Company, being an Investment and Finance company, the Income from
Investment and Finance activities are Operational Income.
(1) Profit/(Loss) on Sale of Investments includes Loss of Rs.
3,85,75,909/- (Previous Year Loss Rs. 4,39,76,180/-) on Current
Investments and Gain of Rs. 12,50,02,811/- (Previous Year Rs.
16,74,25,561/-) on Non current/Long Term Investments.
(2) Provision for diminution in value of Investments written back
include Rs. 1,81,49,018/- provision written back (previous year Rs.
3,15,12,228/-written back) in respect of Non Current/ Long Term
Investments and Rs. 2,55,36,365/- provision written back (Previous Year Rs.
2,45,96,981/- written back) in respect of Current Investments.
(3) Dividend Income includes Rs. 98,73,966/-(Previous Year Rs. 49,60,485/-)
on Long Term/Non current Investments and Rs. 17,70,198/- (Previous year Rs.
14,12,826/-) on Current Investments.
2. CONTINGENT LIABILITIES AND COMMITMENTS (TO THE EXTENT NOT PROVIDED
FOR) CONTINGENT LIABILITIES:
(a) Income Tax demand disputed Rs. 77,92,043/-(Previous year Rs.
72,92,391/-) against which appeals are pending with appropriate
authorities and in respect of which the management is confident that
appeals will be decided in favour of the company.
(b) 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.
COMMITMENTS:
(a) Rs. Nil (Previous Year Rs. 50,30,000/-) on account of uncalled call
money in respect of Partly paid up Shares.
3. QUANTITATIVE DETAILS
Quantitative information in respect of Investments in securities:
4. RELATED PARTY TRANSACTIONS
4.1 List of related parties with whom transactions have taken place
and relationship:
a) Subsidiaries.
1. HB Prima Capital Limited (up to 24th June, 2013)
2. Mount Finance Limited
b) Key Managerial Personnel
1. Shri Vijay Sood, Managing Director
2. Shri J.M.L.Suri, Executive Director
3. Shri Anil Kumar Mittal ,Company Secretary
c) Person having control/significant influence /major shareholders 1.
Shri Lalit Bhasin
d) Associate
1. Pisces Portfolios Private Limited
2. Taurus Asset Management Co. Ltd.
e) Enterprises over which control/significant influence exist of the
relatives of persons mentioned in (c) above :-
1. RRB Master Securities Delhi Ltd.
f) Enterprises under direct or indirect common control/significant
influence:
1. HB Portfolio Ltd.
2. HB Estate Developers Ltd.
3. HB Securities Ltd.(Subsidiary of HB Portfolio Ltd.)
4. RRB Securities Ltd.
5. RRB Masterholdings Ltd. (Subsidiary of RRB Securities Ltd.)
5. SEGMENT REPORTING
In the opinion of Management there are no separate reportable segments
as per Accounting Standard Segment reporting (AS-17).
6. 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. 12,16,092/- (Previous Year Rs. 13,40,292/-)
Later than one year but not Rs. 19,35,384/- (Previous Year Rs. 12,16,092/-)
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 2014 is Rs. 13,40,292/-
(Previous Year Rs. 13,40,292/-).
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.
7. 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.
8. Disclosure pursuant to Accounting Standard AS-22 for accounting for
taxes on Income:- The company is having brought forward losses under
the Income Tax Act. In the absence of virtual as well as reasonable
certainty of the realization and on the consideration of prudence,
credit for Deferred Tax Assets has not been recognised to comply with
Accounting Standard AS-22.
9. Disclosure relating to outstanding derivative exposures in
securities :-
a) Cash Margin amounting to Rs.Nil (Rs.Nil) on Equity Derivative
instruments contracts has been paid and outstanding as at the end of
previous year. However, shares having book value of Rs.
11,91,000/-(Previous year Rs. 39,70,000/-) Market Value Rs.
80,55,000/-(Previous Year Rs. 3,27,50,000/-) were given as margin at the
year end.
Mar 31, 2013
1.1 Shares Costing Rs. 16,88,30,543/- (Previous Year Rs. 14,81,57,552/-)
Were Lying Pledged/Given as Margin as at the Year end.
1.2 As at the year end,based on the last traded price on the stock
exchange,there is diminution amounting to Rs. 32,18,09,439/- (Previous
Year Rs. 32,15,92,108/-) in the Value of Long term/Non current Investment
in DCM Shriram Industries Ltd. However,in the opinion of management the
traded price on the exchange does not reflect its fair value in view of
very thin trading volume on the exchange. Further in view of various
factors such as significant stake,strategic long term
investments,breakup/fair value evidenced by the investee company''s
balance sheet and various other factors,in the opinion of management,no
provision is required to be made of the aforesaid amount of diminution
calculated solely on the basis of last traded price. In the opinion of
management,the valuation of investment at cost is in accordance with
the accounting standard (AS-13).
1.3 The Company''s Investments in DCM Shriram Industries exceeds the
exposure norms as Specified in "Non-Banking (Non Deposit Accepting or
Holding ) Companies Prudential Norms (Reserve Bank) Directions
2007".The Reserve Bank of India has granted extension of time till
March 31,2014 for compliance with the exposure norms.
2 CONTINGENT LIABILITIES AND COMMITMENTS (TO THE EXTENT NOT PROVIDED
FOR) CONTINGENT LIABILITIES:
(a) Income Tax demand disputed Rs. 72,92,391/-(Previous year Rs.
82,53,941/-) against which appeals are pending with appropriate
authorities and in respect of which the management is confident that
appeals will be decided in favour of the company.
(b) Guarantees given on behalf of Related Parties:- Rs. 22,00,00,000/-
(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.
COMMITMENTS:
(a) Rs.50,30,000/-(Previous Year Rs. Nil) on account of uncalled call money
in respect of Partly paid up Shares.
3 RELATED PARTY TRANSACTIONS
3.1 List of related parties with whom transactions have taken place
and relationship:
a) Subsidiaries.
1. HB Prima Capital Limited
2. Mount Finance Limited
b) Key Managerial Personnel
1. Shri Vijay Sood, Managing Director
2. Shri J.M.L.Suri, Executive Director
3. Shri Anil Kumar Mittal ,Company Secretary
c) Person having control/significant influence /major shareholders 1.
Shri Lalit Bhasin
d) Associate
1. Pisces Portfolios Private Limited
2. Taurus Asset Management Co.Ltd.
e) Enterprises over which control/significant influence exist of the
relatives of persons mentioned in(c) above :- 1. RRB Master Securities
Delhi Ltd.
f) Enterprises under direct or indirect common control/significant
influence:
1. HB Portfolio Ltd.
2. HB Estate Developers Ltd.
3. HB Securities Ltd.(Subsidiary of HB Portfolio Ltd.)
4. RRB Securities Ltd.
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-15
Defined Contribution Plan
Amount recognized as expense for defined contribution plans are as
under:-
6 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. 13,40,292/- (Previous Year Rs.13,22,544/-)
Later than one year but not Rs.12,16,092/- (Previous Year Rs.9,49,944/-)
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 2013 is Rs.13,40,292/- (Previous
Year Rs. 12,90,144/-).
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.
7 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.
8 Disclosure pursuant to Accounting Standard AS-22 for accounting for
taxes on Income:-
The company is having brought forward losses under the Income Tax Act.
In the absence of virtual as well as reasonable certainty of the
realization and on the consideration of prudence, credit for Deferred
Tax Assets has not been recognised to comply with Accounting Standard
AS-22.
9 Disclosure relating to outstanding derivative exposures in
securities :-
a) Cash Margin amounting to Rs.Nil (Rs.Nil) on Equity Derivative
instruments contracts has been paid and outstanding as at the end of
previous year. However, shares having book value of Rs.
39,70,000/-(Previous year Rs.1,24,06,250/-) Market Value Rs.
3,27,50,000/-(Previous Year Rs. 12,75,00,000/-) were given as margin at
the year end.
b) Detail of Open Interest in Equity Stock Futures Contracts as at the
year-end 31.03.2013
10 Exceptional Item
Exceptional item consists of Rs. Nil/-(Previous Year Rs. 1,21,62,532) being
interest Income on refund of income tax & Rs. Nil/-(Previous Year Rs.
20,00,000) on account of Claim received in settlement of Legal cases
under Section 138 of the Negotiable Instrument Act.
11 Securities Exchange Board of India (SEBI), vide its Order dated May
09,2012 restrained the Company from buying, selling or dealing in the
securities market whatsoever or accessing the securities market
directly or indirectly for a period of 2 years from the date of the
order. The order has been passed in relation to certain trades carried
out more than 10 years ago in the scrip of a company. Aggrieved with
the said order,the company filed an appeal and also a miscellaneous
application before the Securities Appellate Tribunal (SAT),Vide its
order dated May 17, 2012, the Hon''ble SAT has stayed the operation of
the aforesaid order of SEBI till the disposal of appeal.The Management
is of the firm belief that, and as also legally advised, the order of
SEBI is not tenable and that appeal will be decided in its favour.In
the opinion of the management, the going concern status of the company
will not be impacted.
12 During the year under consideration, an inspection was carried out
between 18th February 2013 and 1st March 2013 by the Reserve Bank of
india with reference to financial position of the Company as on March
31,2012.The RBI vide its letter dated 23rd April 2013 has communicated
to the company its observations.
One of the observation was regarding advances against share application
money outstanding as on 31.03.2012 to be considered as a loss asset.
However, in the opinion of the management the amount is not a loss
asset and moreover the same has been fully recovered subsequent to the
year ended 31.03.2013 upto the date of finalisation of balance sheet
Therefore no provision is required to be made in this regard.
Mar 31, 2012
(1) Provision for diminution in value of Investments written back
include Rs. 18,73,790/
- provision made (previous year Rs. 15,01,246/-) in respect of Non
Current/Long Term Investments and Rs. 17,89,36,879/- provision written
back in respect of Current Investments (Previous Year Rs. 24,00,110/-
written back).
(2) Dividend Income includes Rs. 60,33,596/- (Previous Year Rs.
2,71,46,444/-) on Long Term/Non current Investments and Rs. 8,79,179/-
(Previous year Rs. 18,91,542/-) on Current Investments.
3. CONTINGENT LIABILITIES AND COMMITMENTS (TO THE EXTENT NOT PROVIDED
FOR)
(a) Income Tax demand disputed Rs. 82,53,941/-(Previous year Rs.
2,44,13,018/-) against which appeals are pending with appropriate
authorities and in respect of which the management is confident that
appeals will be decided in favour of the company.
(b) Guarantees given on behalf of Related Parties:- Rs. 22,00,00,000/-
(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.
4. RELATED PARTY TRANSACTIONS
4.1 List of related parties with whom transactions have taken place
and relationship:
a) Subsidiaries.
1. HB Prima Capital Limited
2. Mount Finance Limited
b) Key Managerial Personnel
1. Shri Vijay Sood, Managing Director
2. Shri J.M.L.Suri, Executive Director
3. Shri Anil Kumar Mittal ,Company Secretary
c) Person having control/significant influence /major shareholders
1. Shri H.C. Bhasin (Expired on 07.12.2010)
2. Shri Lalit Bhasin
d) Associate
1. Pisces Portfolios Private Limited
e) Enterprises over which control/significant influence exist of the
relatives of persons mentioned in(c ) above :-
1. RRB Master Securities Delhi Ltd.
f) Enterprises under direct or indirect common control/significant
influence:
1. HB Portfolio Ltd.
2. HB Estate Developers Ltd.
3. HB Securities Ltd.(Subsidiary of HB Portfolio Ltd.)
4. RRB Securities Ltd.
5. SEGMENT REPORTING
In the opinion of Management there are no separate reportable segments
as per Accounting Standard Segment reporting (AS-17).
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 pursuant to Accounting Standard AS-22 for accounting for
taxes on Income:-
The company is having brought forward losses under the Income Tax Act.
In the absence of virtual as well as reasonable certainty of the
realization and on the consideration of prudence, credit for Deferred
Tax Assets has not been recognised to comply with Accounting Standard
AS-22.
8. Disclosure relating to outstanding derivative exposures in
securities :-
a) Cash Margin amounting to Rs.Nil (Rs.Nil) on Equity Derivative
instruments contracts has been paid and outstanding as at the end of
previous year. However, shares having book value of Rs.
1,24,06,250/-(Previous year Rs. 1,75,67,250/-) Market Value Rs.
12,75,00,000/-(Previous Year Rs. 20,46,56,250/-) were given as margin at
the year end.
9. Exceptional Item
Exceptional item consists of Rs. 1,21,62,532/-(Previous Year Rs. NIL) being
interest Income on refund of income tax & Rs. 20,00,000/-(Previous Year Rs.
NIL) on account of Claim received in settlement of Legal cases under
Section 138 of the Negotiable Instrument Act.
10. Securities Exchange Board of India (SEBI),vide its Order dated May
09,2012 restrained the Company from buying, selling or dealing in the
securities market whatsoever or accessing the securities market
directly or indirectly for a period of 2 years from the date of the
order. The order has been passed in relation to certain trades carried
out more than 10 years ago in the scrip of a company. Aggrieved with
the said order, the company filed an appeal and also a miscellaneous
application before the Securities Appellate Tribunal (SAT),Vide its
order dated May 17,2012, the Hon'ble SAT has stayed the operation of
the aforesaid order of SEBI till the disposal of appeal,the hearing of
which has been fixed for July 11,2012.The Management is of the firm
belief that, and as also legally advised, the order of SEBI is not
tenable and that appeal will be decided in its favour. In the opinion of
the management, the going concern status of the company will not be
impacted due to aforesaid order of SEBI, the operation of which has
since been stayed by SAT.
Mar 31, 2011
1. (a) Advances recoverable includes due from subsidiary companies Rs.
3,57,50,000/- (Previous year Rs. 24,50,000/-) from HB Prima Capital
Ltd., maximum balance outstanding during the year Rs.
3,57,50,000/-(Previous year 24,50,000/-) and Rs. 9,84,436/- (Previous
year Rs. 8,89,436/-) due from Mount Finance Ltd. Maximum balance
outstanding during the year Rs. 9,84,436/- (Previous year Rs.
8,89,436/-).
2. Contingent Liability in respect of:- (a) Income Tax demand disputed
Rs.2,44,13,018/-(Previous year Rs.1,25,18,711/-)
against which appeals are pending with appropriate authorities and in
respect of which the management is confident that appeals will be
decided in favour of the company.
The company has also filed various rectification applications. Moreover
substantial refund due to the company for various years are pending
adjustment against the aforesaid demand. Once the aforesaid
rectification applications are disposed off and refund due to the
company are adjusted, there will be no demand outstanding payable. (b)
Guarantees issued on behalf of companies under the same management:- i)
HB Securities Ltd. Rs.15,00,00,000/-(previous year
Rs.15,00,00,000)/- ii) RRB Master Securities Delhi Ltd.
Rs.7,00,00,000/-(previous year Nil) Subsequent to the year end, HB
Securities Ltd. has written to their bank for withdrawal of guarantee
of Rs.15,00,00,000/- 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 guarantees were given
in view of overall long term business involvement/relation of the
company with the aforesaid companies. In the opinion of management, the
giving of aforesaid guarantees will not have any prejudicial impact on
the company.
3. In the opinion of the management, current assets, loans and
advances are approximately of the value stated, if realised, in the
ordinary course of the business.
4. Gain on Sale of Investments (Net) as shown in Profit & Loss Account
includes Loss of Rs.3, 40,73,877/- (Previous Year Loss Rs.
1,28,41,104/-) on Trade Current Investments and Gain of Rs.8,
85,70,455/- (Previous Year Rs. 5,49,76,439/-) on Long Term Trade
Investments. Provision for diminution in value of Investments as shown
in Profit & Loss Account include Rs.15,01,246/- provision made
(previous year Rs.1,70,51,295/- written back) in respect of Long Term
Investments and Rs. 24,00,110/- written back in respect of Current
Investments (Previous Year Rs. 10,87,86,968/-).
5. Dividend Income includes Rs. 2,71,46,444/- (Previous Year Rs
2,73,11,528/-) on Long Term Investments-Trade, Rs. 18,91,542/-(Previous
year Rs. 16,03,009/-) on Current Investments-Trade.
6. Provision for diminution in the value of Investments is charged to
Profit & Loss Account and shown correspondingly under the head
"Provisionsà in the Balance Sheet without showing it as deduction from
the value of Investments. This is being done in compliance with
Non-banking Financial (Non-Deposit Accepting or Holding) Companies
Prudential Norms (Reserve Bank) Directions 2007. It has no impact on
the profit for the year and also on the net carried amount of the
investments. Provision for diminution in value of Investments as shown
in Balance Sheet includes Rs. 13,33,33,406/- (Previous Year Rs.
13,18,32,160/-) on Long term Investments and Rs. 25,38,86,395/-
(Previous Year Rs. 25,62,86,506/-) on Current Investments
7. In the opinion of management no provision is required for
diminution amounting to Rs.19, 96,69,557/-(previous year Rs.
9,98,12,627/-) in the value of Long term investment in DCM Shriram
Industries Ltd. as the same is considered to be temporary.
8. The company is having brought forward losses under the Income Tax
Act. In the absence of virtual as well as reasonable certainty of the
realization and on the consideration of prudence, credit for Deferred
Tax Assets has not been recognised to comply with Accounting Standard
AS-22.
9. Disclosure pursuant to Accounting Standard AS-19 for Leases: -
Operating Lease
a) Particulars of the minimum lease payments under Operating Lease:- I.
Not Later than One year Rs.11, 65,948/- (Previous Year Rs.12, 73,948/-)
II. Later than one year but not Rs. 9,49,948/- Later than five years
(Previous Year Rs.21, 15,895/-)
III. Later than five years Rs. Nil
(Previous Year NIL)
b) Minimum lease payments recognised in the statement of profit & loss
account during the year ended 31st March 2011 is Rs.
12,73,944/-(Previous Year Rs13, 18,511/-).
c) General description of the lease arrangement.
I. The lease is for an initial period of 3 years, which may be renewal
for further period as may be mutually agreed upon. II Restrictions
imposed by lease arrangement:- Ã
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.
à The lessee shall use the premises for commercial purposes
only.
à The lessee can terminate the lease by serving three months
notice to the lessor in respect of one agreement and one-month notice
in respect of second agreement.
10. In the opinion of Management there are no separate reportable
segments as per Accounting Standard Segment reporting (AS-17).
11. Disclosure of related party transaction in accordance with the
Accounting Standard (AS-18) "Related Party Disclosuresà is as per
annexure attached.
12. Earning per share pursuant to Accounting Standard (AS-20) "Earning
Per Share".
13. Traveling Expenses includes Rs. 7,37,096/-(Previous Year
Rs.9,43,647/-) on account of Directors Travelling.
14. The Companys investments in certain scrips exceeds the exposure
norms as specified in Non-Banking Financial (Non deposit accepting or
holding) companies Prudential norms (Reserve bank Directions 2007. The
company has made an application to Reserve Bank of India for exemption
for a period of 5 years from applicability of these provisions to the
company. The Reserve Bank of India has also sought
clarification/compliance from the company on the matter. The Necessary
representations/clarification is being made to Reserve Bank of India.
The management is confident of getting the exemption.
15. (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.
16. Disclosure relating to outstanding derivative exposures in
securities :- (a) Cash Margin amounting to Rs.Nil (Rs.Nil) on Equity
Derivative instruments contracts
has been paid and outstanding as at the end of previous year. However,
shares having book value of Rs.1,75,67,250/-(Previous year
Rs.1,04,21,250/-) Market Value Rs. 20,46,56,250/-(Previous Year Rs.19,
64,15,625/-) were given as margin at the year end.
17 Previous Year figures have been regrouped/rearranged wherever
considered necessary.
Mar 31, 2010
1. (a) Advances recoverable includes due from subsidiary companies
Rs.24,50,000/- (Previous year Rs.24,50,000/-) from HB Prima Capital
Ltd., maximum balance outstanding during the year
Rs.24,50,000/-(Previous year 24,50,000/-) and
2. Contingent Liability in respect of:-
(a) Income Tax demand disputed Rs.1,25,18,711/-(Previous year
Rs.89,05,374/-) against which appeals are pending with appropriate
authorities and in respect of which the management is confident that
appeals will be decided in favour of the company.
The company has also filed various rectification applications. Moreover
substantial refund due to the company for various years are pending
adjustment against the aforesaid demand. Once the aforesaid
rectification applications are disposed off and refund due to the
company are adjusted, there will be no demand outstanding payable.
3. In the opinion of the management, current assets, loans and
advances are approximately of the value stated, if realised, in the
ordinary course of the business.
4. Gain on Sale of Investments (Net) as shown in Profit & Loss Account
includes Loss of Rs.1,28,41,104/-on Trade Current Investments in
securities (Previous Year Loss Rs.2,07,36,324/-), Gain of
Rs.5,49,76,439/- (Previous Year Rs.20,88,47,484/-) on Long Term Trade
Investments in securities and Gain of Rs. Nil (previous year
Rs.18,64,42,000/ -) on properties(current investment- trade). Provision
for diminution in value of Investments as shown in Profit & Loss
Account include Rs.1,70,51,295/-(previous year Rs.1,83,95,601/ -) on
account of provision written back in respect of Long Term Investments
in securities and Rs. 10,87,86,968/- in respect of Current Investments
in securities(Previous Year provision made Rs.21,23,28,365/-).
5. Dividend Income includes Rs.2,73,11,528/- (Previous Year Rs
92,33,961/-) on Long Term Investments-Trade, Rs. 16,03,009/-(Previous
year Rs. 49,36,706/-) on Current Investments-Trade.
6. Provision for diminution in the value of Investments is charged to
Profit & Loss Account and shown correspondingly under the head
ÃProvisionsà in the Balance Sheet without showing it as deduction from
the value of Investments. This is being done in compliance with
Non-banking Financial (Non-Deposit Accepting or Holding) Companies
Prudential Norms (Reserve Bank) Directions 2007. It has no impact on
the profit for the year and also on the net carried amount of the
investments. Provision for diminution in value of Investments as shown
in Balance Sheet includes Rs.13,18,32,160/-(Previous Year Rs.
14,88,83,456/-) on Long term Investments and Rs.
25,62,86,506/-(Previous Year Rs.36,50,73,474/-) on Current Investments
7. The company is having brought forward losses under the Income Tax
Act. In the absence of virtual as well as reasonable certainty of the
realization and on the consideration of prudence, credit for Deferred
Tax Assets has not been recognised to comply with Accounting Standard
AS-22.
8. Disclosure pursuant to Accounting Standard AS-19 for Leases :-
Operating Lease
a) Particulars of the minimum lease payments under Operating Lease:- I.
Not Later than One year (Previous Year Rs.11,85,240/-) Rs. 12,73,948/-
II. Later than one year but not Later than five years Rs. 21,15,895/-
(Previous Year Rs.14,01,240/-)
III. Later than five years (Previous Year NIL) Rs. Nil
b) Minimum lease payments recognised in the statement of profit & loss
account during the year ended 31st March, 2010 is Rs.
13,18,511/-(Previous Year Rs16,14,373/-).
c) General description of the lease arrangement. I. The lease is for
an initial period of 3 years, which may be renewal for further period
as may be mutually agreed upon. II Restrictions imposed by lease
arrangement:- Ã 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.
à The lessee shall use the premises for commercial purposes only.
à The lease can be terminated by the lessee by serving three months
notice to the lessor in respect of one agreement and one month notice
in respect of second agreement.
9. In the opinion of Management there are no separate reportable
segments as per Accounting Standard Segment reporting (AS-17).
10. Disclosure of related party transaction in accordance with the
Accounting Standard (AS- 18) ÃRelated Party Disclosuresà is as per
annexure attached.
11. The CompanyÃs investments in certain scrips exceeds the exposure
norms as specified in Non-Banking Financial (Non deposit accepting or
holding) companies Prudential norms (Reserve bank ) Directions 2007.
The company has made an application to Reserve Bank of India for
exemption for a period of 5 years from applicability of these
provisions to the company.
12. In the opinion of management no provision is required for
diminution amounting to Rs.9,98,12,627/-(previous year
Rs.27,58,08,858/-)in the value of Long term investment in DCM Shriram
Industries Ltd. as the same is considered to be temporary.
13. Traveling Expenses includes Rs.9,43,647/-(Previous Year
Rs.12,52,160/-)on account of DirectorÃs Travelling.
14. (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.
15. Disclosure pursuant to Guidance Note issued by The Institute of
Chartered Accountants of India on ÃAccounting for Equity Index & Equity
Stock Futures & OptionsÃ:- (a) Cash Margin amounting to Rs.Nil (Rs.Nil)
on Equity Derivative instruments contracts has been paid and
outstanding as at the end of previous year. However, shares having book
value of Rs.1,04,21,250/-(Previous year Rs.69,09,000/-)Market Value
Rs.19,64,15,625/-(Previous Year Rs.7,36,75,000/- ) were given as margin
at the year end.
16. Previous Year figures have been regrouped/rearranged wherever
considered necessary.
17. Additional information pursuant to part IV of Schedule VI of the
Company Act, 1956 is annexed.
18. Additional Information pursuant to Non-banking Financial
(Non-Deposit Accepting or Holding) Companies Prudential Norms (Reserve
Bank) Directions 2007 is annexed.
19. Schedules 1 to 12 form an integral part of the accounts.
ANNEXED REFERRED TO IN NOTE NO. 10 OF SCHEDULE 12 TO THE ACCOUNTS
RELATED PARTY DISCLOSURES (AS IDENTIFIED BY MANAGEMENT AND RELIED UPON
BY AUDITORS)
As per Accounting Standard (AS-18) on ÃRelated Party DisclosuresÃ, the
disclosure of transactions with the related party as defined in the
Accounting Standard are given below:
1. List of related parties with whom transactions have taken place and
relationship :
a) Subsidiaries.
i) HB Prima Capital Limited ii) Mount Finance Ltd.
b) Key Managerial Personnel
i) Shri Vijay Sood, Managing Director ii) Shri J.M.L.Suri, Executive
Director iii) Shri Anil Kumar Mittal ,Company Secretary
c) Person having control/significant influence /major shareholders i)
Shri H C Bhasin (no transaction during the year)
ii) Shri Lalit Bhasin
d) Enterprise over where significant influence exist:- i) Pisces
Portfolios Private Limited
e) Enterprises over which control/significant influence exist of the
relatives of persons mentioned in (c ) above :- i) RRB Master
Securities Delhi Ltd.
f) Enterprises under direct or indirect common control/significant
influence :- i) HB Portfolio Ltd.
ii) HB Estate Developers Ltd.
iii) HB Securities Ltd.(Subsidiary of HB Portfolio Ltd.)
iv) RRB Securities Ltd.