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Notes to Accounts of IIFL Holdings Ltd.

Mar 31, 2013

1. CORPORATE INFORMATION:

India Infoline Limited was incorporated on October 18, 1995 and commenced its operations as an independent provider of information, analysis and research covering Indian businesses, financial markets and economy, to institutional clients. Over a period, India Infoline Ltd expanded its service offerings in the financial services space offering equity / currency broking in NSE / BSE and MCX-SX, Depository Participant services, merchant banking, portfolio management services and distribution of mutual fund, bonds etc. India Infoline Ltd is registered with SEBI for the above services. India Infoline Ltd is one of the leading players in the Indian financial services space. India Infoline Ltd operates through a network of close to 2,000 business locations across India.

NOTE 2. During the Previous Financial year 2011-12 the Company had sold its marketing and distribution business (including all its assets and liabilities of marketing and distribution business) of India Infoline Marketing services Ltd. by way of slump sale on a going concern basis to India Infoline Media and Research Ltd. a subsidiary of the company, for a lump sum consideration of Rs. 469,822,400/- vide agreement dated January 16, 2012. The profit earned by Company by virtue of this slump sale was Rs. 143,604,348/-.

NOTE 3. In order to achieve simplified business structure, focused management, strengthen core competencies and enhance value creation for the group, the Board of Directors of your Company have approved transfer of Company''s broking, Depository Participant, Portfolio Management, Mutual Fund Distribution and Investment Banking businesses ("Financial Services Undertaking") to a wholly owned subsidiary, India Infoline Distribution Company Limited ("IIDCL"), through a scheme of arrangement in terms of Section 391 to 394 of the Companies Act, 1956. As the said transfer is to a wholly owned subsidiary, it does not involve issue of new shares by the Company. The Appointed Date of the Scheme is April 1, 2013. The Scheme is subject to necessary approvals of regulatory authorities, shareholders, creditors and High Court. The Company has already initiated the process to seek the various requisite approvals. The Company continues with its remaining business and accordingly the accounts for the financial year have been prepared on a going concern basis.

NOTE 4. The claim against the Company not acknowledged as debt were Rs. 16,939,813/- (previous yearRs. 11,389,141/-), As of March 31, 2013, we had certain contingent liabilities not provided for, including the following:

NOTE 5. CAPITAL AND OTHER COMMITMENTS AT BALANCE SHEET DATE

There were outstanding commitments for capital expenditure (net of advances) to the tune of Rs. 19,738,682/- (previous year Rs. 54,189,295/-) and Other Commitment to the tune of Rs. 450,000,000/- (previous year Rs. 562,500,000/-) of the total contractual obligation entered during the year.

NOTE 6. The Company has taken office premises on operating lease at various locations. Lease rents in respect of the same have been charged to Statement of Profit and Loss. The agreements are executed for a period ranging from one to five years with a renewable clause. Some agreements have a clause for a minimum lock-in period. The agreements also have a clause for termination by either party after giving a prior notice period between 30 to 90 days. The Company has also taken some other assets under operating lease. The minimum future Lease rentals outstanding as at March 31, 2013, are as under:

The Company has taken office premises on operating lease at various locations. Lease rents in respect of the same have been charged to Statement of Profit and Loss. The agreements are executed for a period ranging from one to five years with a renewable clause. Some agreements have a clause for a minimum lock-in period. The agreements also have a clause for termination by either party after giving a prior notice period between 30 to 90 days. The Company has also taken some other assets under operating lease. The minimum future Lease rentals outstanding as at March 31, 2013, are as under:

NOTE 7. The Company has implemented Employee Stock Option Scheme 2005, 2007, 2008 (ESOP Schemes) and has outstanding options granted under the said Schemes. The options vest in graded manner and must be exercised within a specified period as per the terms of the grants made by the Remuneration and Compensation Committee and ESOP Schemes.

NOTE 8. The Company recognized deferred tax assets for the year ended on March 31, 2013, since the management is reasonably / virtually certain of its profitable operations in future. As per Accounting Standard 22 ''Accounting for Taxes on Income'', the timing differences mainly relates to following items and result in a net deferred tax asset.

NOTE 9. In the opinion of the management, there is only one reportable business segment as envisaged by AS 17 ''Segment Reporting''. Accordingly, no separate disclosure for segment reporting is required to be made in the financial statements of the Company.

Secondary segmentation based on geography has not been presented as the Company operates primarily in India and the Company perceives that there is no significant difference in its risk and returns in operating from different geographic areas within India.

NOTE 10. The Company provides for the use by its subsidiaries certain facilities like use of premises, infrastructure and other facilities/services and the same are termed as ''Shared Services''. The cost of such Shared Services are recovered from subsidiaries either on actual basis or on reasonable management estimates, which are constantly refined in the light of additional knowledge gained relevantto such estimation

NOTE 11. Previous year figures have been regrouped, reclassified & rearranged, wherever considered necessary to confirm to current year''s presentation.


Mar 31, 2012

Note: 1. CORPORATE INFORMATION:

India Infoline Limited was incorporated on October 18, 1995 and commenced its operations as an independent provider of information, analysis and research covering Indian businesses, financial markets and economy, to institutional clients. Over a period, India Infoline Ltd expanded its service offerings in the financial services space offering equity / currency broking in NSE / BSE and MCX-SX, depository participant services, merchant banking, portfolio management services and distribution of mutual fund, bonds etc. India Infoline Ltd is registered with SEBI for the above services. The Company is one of the leading players in the Indian financial services space. It operates through a network of over 3,000 business locations spread over more than 500 cities and towns across India. During the year under review, India Infoline Marketing Services Limited a wholly owned subsidiary, merged with the Company pursuant to order issued by Hon'ble High Court at the judicature of Bombay.

a. Terms / rights attached to equity shares

The Company has only one class of equity shares having par value of Rs. 2 per share. Each holder of equity shares is entitled to one vote per share. The Company declares and pays dividends in Indian rupees.

During the year ended March 31, 2012, the amount of per share dividend recognised as distribution to equity shareholders was Rs. 1.50 (Previous Year Rs. 3.00)

b. Shares reserved for issue under options:

For details of shares reserved for issue under the Employee Stock Option (ESOP) plan of the Company, please refer note 32.

Note: 2.

Pursuant to Section 391 - 394 of Companies Act, 1956, India Infoline Marketing Services Limited (IIMSL), a wholly owned subsidiary, was merged with India Infoline Limited. The merger was approved by Hon'ble High Court at the judicature of Bombay vide its order dated April 27, 2012. The appointed date of the merger is April 1, 2011.

IIMSL was engaged in marketing and distribution of financial products and other services.

The merger has been accounted for under the "Pooling of Interest" method as prescribed by the Accounting standard (AS) 14 on "Accounting for Amalgamations" notified under the Companies (Accounting Standard) Rules. The scheme has, accordingly, been given effect to in these financial statements as approved by the Hon'ble High Court at the judicature of Bombay.

All the Assets, Liabilities and Investments have been transferred to the Company at value appearing in the books of accounts of IIMSL as on March 31, 2011. Excess of assets over liabilities amounting to Rs. 1,645,011,953/- has been considered as capital reserve.

Upon the scheme being effective, the authorised share capital of the Company has increased to 600,000,000 equity shares of Rs. 2 each, amounting to Rs. 1,200,000,000/-.

The current year figures include the results of IIMSL and are therefore not comparable with those of the previous year.

Note: 3.

During the year, the Company has sold its marketing and distribution business (including all its assets and liabilities of marketing and distribution business of India Infoline Marketing services Ltd. which got merged with the Company as mentioned above in the Note no 26), by way of slump sale on a going concern basis to India Infoline Media and Research Ltd., a subsidary of the Company, for a lump sum consideration of Rs. 469,822,400/- vide agreement dated January 16, 2012. The profit earned by Company by virtue of this slump sale was Rs. 143,604,348/-.

Note: 4. CAPITAL AND OTHER COMMITMENTS AT BALANCE SHEET DATE:

There were outstanding commitments for capital expenditure (net of advances) to the tune of Rs. 54,189,295/- (previous year Rs. 69,068,704/-) and Other Commitment to the tune of Rs. 562,500,000/- (previous year Rs. Nil) of the total contractual obligation entered during the year.

Note: 5.

The Company has implemented Employee Stock Option Scheme 2005, 2007, 2008 (ESOP Schemes) and has outstanding options granted under the said Schemes. The options vest in graded manner and must be exercised within a specified period as per the terms of the grants made by the Remuneration and Compensation Committee and ESOP Schemes.

Note: 6.

The Company recognized deferred tax assets for the year ended March 31, 2012, since the management is reasonably / virtually certain of its profitable operations in future. As per Accounting Standard 22 'Accounting for Taxes on Income', the timing differences mainly relates to following items and result in a net deferred tax asset.

Note: 7.

In the opinion of the management, there is only one reportable business segment as envisaged by AS 17 'Segment Reporting'. Accordingly, no separate disclosure for segment reporting is required to be made in the financial statements of the Company.

Secondary segmentation based on geography has not been presented as the Company operates primarily in India and the Company perceives that there is no significant difference in its risk and returns in operating from different geographic areas within India.

Note: 8.

The Company provides for the use by its subsidiaries certain facilities like use of premises, infrastructure and other facilities / services and the same are termed as 'Shared Services'. The cost of such Shared Services are recovered from subsidiaries either on actual basis or on reasonable management estimates, which are constantly refined in the light of additional knowledge gained relevant to such estimation.

The above monies have been received against ESOPs exercised by certain eligible employees. The above shares have been issued during the current financial year and are well within the overall authorised capital of the Company. The shares were allotted as per the term of the respective ESOP Schemes.

Note: 9.

Previous year figures have been regrouped, reclassified & rearranged, wherever considered necessary to confirm to current year's presentation.


Mar 31, 2011

1. At balance sheet date, there were outstanding commitments for capital expenditure (net of advances) to the tune ofRs 69,068,704 (previous year Rs 104,993,301) of the total contractual obligation entered up to the end of the year.

2. The claims against the company not acknowledged as debt wereRs 65,233,873. contingent liability on account of income tax matter amounts to Rs 9,249,439 (previous yearRs 7,695,910) the company has filed appeals with the tax authorities against the said demands.

3. The company has provided corporate Guarantee on behalf of the following subsidiaries.

4. The company has implemented employee Stock Options Scheme 2005, 2007 and 2008 (ESOP Schemes) and has outstanding options granted under the said schemes. the options vest in graded manner and must be exercised within a specified period as per the terms of grants by the compensation / Remuneration committee and ESOP Schemes.

5. Pursuant to the resolution passed by the Board of Director of the company and in accordance with the provisions of the companies act, 1956 and the Securities and exchange Board of India (Buyback of Securities) Regulations, 1998, the company made a public announcement on December 24, 2010, to buy-back the companys equity shares at a price not exceeding Rs 99 share, aggregating to Rs 1,040 mn. the buy-back was successfully completed and the company bought back 12,998,877 equity shares and utilised maximum offer size of Rs 1,040 mn.

6. The company recognised deferred tax assets since the management is reasonably / virtually certain of its profitable operations in future. as per accounting Standard 22 accounting for taxes on income, the timing differences mainly relates to following items and result in a net deferred tax asset.

7. Company has pledged fixed deposits to the extent ofRs 2,670.00 mn (previous year Rs 2,515.14 mn) with banks for bank guarantees/ overdraft facilities and with the stock exchanges.

8. In the opinion of the management, there is only one reportable business segment as envisaged by AS 17 Segment Reporting. accordingly, no separate disclosure for segment reporting is required to be made in the financial statements of the company.

Secondary segmentation based on geography has not been presented as the company operates primarily in India and the company perceives that there is no significant difference in its risk and returns in operating from different geographic areas within India.

9. Financial income includes dividend on non trade and other investments of Rs 158,066,959 (previous year Rs 55,160,035), interest of Rs 696,477,129 (previous yearRs 186,282,511) and Profit on sale of investments Rs 150,992,725 (previous year Rs 80,746,527 ).

10. Interest expenses include the interest on debentures Rs 22,681,825 (Previous year Rs 71,881,046) and discount on commercial paper Rs 810,600,446 (Previous yearRs 22,623,911).

11. The company provides for the use by its subsidiaries certain facilities like use of premises, infrastructure and other facilities/services and the same are termed as Shared Services. the cost of such Shared Services are recovered from subsidiaries either on actual basis or on reasonable management estimates, which are constantly refined in the light of additional knowledge gained relevant to such estimation.

12. There are no dues to micro & small enterprises (MSEs) outstanding for more than 45 days.

13. Other requirements of Para 3 and 4 of part ii to Schedule VI of the companies act, 1956 are not applicable to the company.

14. Previous year figures have been regrouped, reclassified & rearranged, wherever considered necessary to conform to current years presentation.


Mar 31, 2010

1. At balance sheet date, there were outstanding commitments for capital expenditure (net of advances) to he tune of Rs. 104,993,301 (previous year Rs. 76,135,859) of the total contractual obligation entered during the year

2. The Company does not have contingent iabilities not provided for other than an ncome ax mater amountng to Rs.7,695,910. The Company has filed an appeal with the tax authorities against the said demand.

3. The Company has implemented Employee Stock Options Scheme 2005, 2007 and 2008 ESOP Schemes) and has outstanding options granted under the said schemes. The options vest in graded manner and must be exercised within a specified period as per the terms of grants by the Remuneration and Compensation Committee and ESOP Schemes.

4. Pursuant to the resolution passed by the Board of Directors of the Company and in accordance with the provisions of the Companies Act, 1956 and the Securities and Exchange Board of India (Buy Back of Securities) Regulations, 1998, the Company made a Public Announcement on December 4, 2008, to buy-back the equity shares of the Company at a price not exceeding Rs. 43.20 per share, aggregating to Rs. 98.91 crore subject to a Buy-back of minimum 5,000,000 Equity Shares and maximum of 60,000,000 Equity Shares. The Buy-back was open from December 18, 2008 and closed on November 28, 2009 and the Company bought back 2,557,915 equity shares at an aggregate value of Rs. 10.80 crore. Consequently, the paid-up equity share capital of the Company declined from Rs. 57.19 crore to Rs. 56.68 crore as on November 28, 2009.

5. The Company has reduced its Gross block and accumulated depreciation for those assets having zero net block as on 31st March 2010 amounting to Rs. 80,116,662 (P.Y. Rs.156,049,067) The Company has also regrouped assets amounting to Rs. 81,689,935 during the year (P.Y. Rs. Nil)

6. During the year the Company has invested in NFL Wealth (UK) Ltd (wholly owned subsidiary) and India Infoline Trustee Company Ltd (wholly owned subsidiary) amounting to Rs.3,825,000 and Rs. 500,000 respectively. The Company has also contributed Rs.67,500,000 to India Infoline Venture Fund.

7. The Company recognised deferred tax assets for the year ended on 31st March 2010 since the management s reasonably/virually certain of its profitable operations in future. As per Accounting Standard 22 Accounting for Taxes on Income the timing differences mainly relates to following items and result in a net deferred tax asset.

8. Company has pledged fixed deposits to the extent of Rs. 2,515.14 Millon previous year 1,554.20 Millon) wih banks for bank guarantees/ overdraft facilities and with the stock exchanges.

9. Disclosure of oans/advances and investments in s own shares by the Listed Company, subsidiares and associates etc. as required

10. The Company has taken office premises on operating lease at various locations. Lease rent in respect of the same have been charged to Profit and Loss account .The agreements are executed for a period ranging from one to five years with a renewable clause. Some agreements have a clause for a minimum lock-in period. The agreements also have a clause for termination by either party giving a prior notice period between 30 to 90 days. The Company has also taken some other assets under operating lease. The minimum Lease rentals outstanding as at March

11. In the opinion of the management, here s only one reportable business segment as envisaged by AS 17 Segment Reporng1. Accordingly, no separate disclosure for segment reporting is required to be made in the financial statements of the Company.

Secondary segmentation based on geography has not been presented as the Company operates primarily in India and the Company perceives that there is no significant difference in its risk and returns in operating from diferent geographic areas within India.

12. The Company has reported revenues net of service tax, stamp duty and other regulatory charges compared to an inclusive method of reporting followed earlier This has resulted in a reduction in total revenues and direct costs to the extent of Rs. 1,046 mn each for he current year and Rs. 795 mn each for the previous year.

13. Financial income includes dividend on investments of Rs. 55,160,035 (previous year Rs. 151,667,039) interest of Rs. 186,282,511 (previous year Rs. 162,376,930) and Profit on sale of nvestments Rs. 80,746,527 (previous year (Rs. 21,355,583)).

14. Interest expenses include the interest on debentures Rs. 71,881,046 Previous year Rs. 28,289,522) and discount on commercial paper Rs. 22,623,911 (Previous year 47,834,812).

15. The Company provides for the use of its wholly owned subsidiaries certain facilities like use of premises, infrastructure and other facilities and services and the same are termed as Shared Services. Such shared services consisting of administrative and other revenue expenses paid for by the Company are recovered on an actual basis from subsidiaries and estimates are used where actuals are diffcult to determine.

16. There are no dues to micro & smal enterprises (MSEs) outstanding for more than 45 days.

17. Other equirements of Para 3 and 4 of part II o Schedule VI of he Companies Act,1956 are not applicable to the Company.

18. Previous year gures have been egrouped, eclassifed & earranged, wherever considered necessary to confrm to curent years presentation.

 
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