Home  »  Company  »  HB Stockholding  »  Quotes  »  Notes to Account
Enter the first few characters of Company and click 'Go'

Notes to Accounts of HB Stockholdings Ltd.

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 "Provisions” 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:- –

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 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 Disclosures” 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 “Provisions” 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:- — 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 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) “Related Party Disclosures” is as per annexure attached.

11. The Company’s 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 Director’s 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 ‘Accounting for Equity Index & Equity Stock Futures & Options’:- (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 “Related Party Disclosures”, 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.

Find IFSC