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Notes to Accounts of Industrial Investment Trust Ltd.

Mar 31, 2015

(A) Rights, preferences and restrictions attached to equity shares

Equity shares of the Company are issued at a par value of Rs. 10 per share.

(i) Equity Shares represented by GDS - Holders of the GDSs will have no voting rights with respect to the underlying equity shares. The Depository will not exercise any voting rights with respect to the deposited shares. Other rights, preferences and restrictions are same as other equity shares.

(ii) Other Equity Shares - Each holder of other equity shares is entitled to one vote per share. The Company declares and pays dividend in Indian rupees. The dividend, if any, proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting.

In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the Company, after payment of all claims/liabilities and preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.

(B) Rights, preferences and restrictions attached to preference shares

The Preference Shares shall rank, for capital and dividend (including all dividends undeclared upto the commencement of winding up) and for repayment of capital in a winding up pari pasu inter se and in priority to the Equity Shares of the Company, but shall not confer any further or other right to participate either in profits or assets.

2.1 Contingent liabilities and commitments not provided for

Particulars As at As at 31st March,2015 31st March,2014

(i) Contingent liabilities:

(a) Claims against the Company not acknowledged as debt

- Disputed income-tax matters in appeal 13,101,449 13,101,449

- Disputed wealth-tax matter in appeal 3,250,246 3,250,246

- Disputed property tax levied by Mumbai Municipal Corporation based on enhanced ratable value for the period 1st April 2007 to 31st March 2010 in respect of the Company''s Investment Property; the Co- operative Society of the Investment Property 24,869,855 24,869,855

is acting as an intervener in a petition with the Supreme Court on the matter. The said disputed property tax is recoverable from the ex-Licensee as per the Leave and License Agreements entered into between them and the Company.

In respect of above items, outflow of resources would depend upon the outcome of the appeal/petition.

(b) Guarantees

Guarantees given to banks on behalf of associate company 253,400,000 253,400,000

The Company has received counter-guarantees from other parties amounting to Rs. 190,050,000 (previous year Rs. 190,050,000) against the aforesaid guarantees given by the Company to the banks. The outstanding amount of loan availed by the associate company as at 31st March 2015 is Rs. 142,563,425 (as at 31st March 2014Rs.180,564,848).

(ii) Commitments:

(a) Other Commitments

Non-cancellable contractual commitments - See Note 2.25

(a) Defined Contribution Plan

The Company makes Provident Fund contributions which are defined contribution plans, for qualifying employees. The Company recognised Rs. 673,457 (previous year Rs. 628,040) for Provident Fund contributions in the Statement of Profit and Loss. (See ''Contribution to provident and other funds'' in Note 2.16)

(b) Defined Benefit Plan

The Company offers its employees defined-benefit plan in the form of a Gratuity Scheme. Benefits under the defined benefits plan are typically based on years of service and the employees compensation covering all regular employees. Commitments are actuarially determined at year-end. The benefits vests upon completion of five years of continuous service and once vested it is payable to employees on retirement or on termination of employment. The Company makes annual contribution to the group gratuity scheme administered by the Life Insurance Corporation of India.

vi a. The estimate of rate of escalation in salary considered in actuarial valuation takes into account inflation, seniority, promotion and other relevant factors including supply and demand in the employment market.

b. The discounting rate is considered based on market yield on government bonds having currency and terms consistent with the currency and terms of the post-employment benefit obligations.

c. Expected rate of return on assets is determined based on the average long term rate of return expected on investments of the fund during the estimated term of the obligations.

2.2 Related party disclosures:

(i) Names of related parties:

(a) Names of related parties and nature of related party relationship where control exists are as under:

Subsidiary companies:

IIT Investrust Limited

IITL Projects Limited

IIT Insurance Broking and Risk Management Private Limited

IITL Marketing Management Private Limited (Formerly IIT Media and Entertainment Private Limited upto 19th Nov 2014)

IITL Corporate Insurance Services Private Limited (w.e.f. 22nd Jan 2014)

Joint venture :

Future Generali India Life Insurance Company Limited (w.e.f. 17th December, 2013)

(b) Names of other related parties and nature of relationship:

Key management personnel : Dr. B. Samal, Executive Chairman

Associate company : World Resort Limited Entities over which the company can exercise significant influence :

IITL Nimbus The Express Park View - a partnership firm

IITL Nimbus The Palm Village - a partnership firm

IITL Nimbus The Hyde Park Noida -a partnership firm

Capital Infraprojects Private Limited

MRG Hotels Limited

2.3 Details of leasing arrangements

The Company has taken an office premise and residential premise on operating lease. There are no restrictions imposed by the lease arrangement. There are no sub-leases. The lease rental expense recognised in the Statement Profit and Loss for the year is Rs. 2,942,700 (previous year: Rs. 1,824,367). [net of recoveries Rs. 840,000 (previous year: Rs. 1,000,000)]

The future minimum lease payments under non-cancellable operating leases for each of the following periods:

Note: The Company has given unsecured short term loans to its subsidiary and joint ventures of that subsidiary engaged in real estate business of construction of residential complexes which are not covered by the above mentioned categories. The outstanding balance of such loans is Rs. 680,869,727 (Previous year Rs. 650,000,000). The Company also has long-term equity investments in the said subsidiary of Rs. 136,123,073 (Previous year Rs. 136,123,073).

Note:

The above maturity pattern of assets and liabilities has been prepared by the Company after taking into consideration structural liquidity guidelines for assets-liabilities management (ALM) system in non-banking financial companies issued by RBI, best practices and best estimate of the Assets-Liability Committee with regard to the timing of various cash flows, which has been relied upon by the auditors.

2.4 The Company is engaged in Investment activities and in Insurance business undertaken through the joint venture company FGILICL. Hence there are two reportable business segments as per Accounting Standard-17 Segment Reporting notified by the Companies (Accounting Standards) Rules, 2006. The Company operates only in one geographical segment i.e. India. The segment information has been provided in the consolidated financial statements.

2.5 The Company had entered into Share Purchase Agreement with Pantaloon Retail India Limited (now known as Future Retail Limited) to acquire 22.5% of its equity stake in Future Generali India Life Insurance Company Ltd (FGILICL). Pursuant to approval received from CCI, RBI & IRDA the transaction was consummated on 17th December 2013 for a total consideration of Rs. 340 crores. FGILICL became a joint venture of the Company.

The management views the investment in positive light as insurance industry plays a crucial role in the growth and development of the overall economy. There is a huge potential to be tapped across India for not only life but also micro insurance. Life Insurance Industry has a long gestation period and the Company views this as a long term investment. Having regard to this and the projections made by FGILICL, the management of the Company is of the view that, although the networth of FGILICL as at 31st March 2015 has substantially eroded, there is no diminution other than temporary in the value of investment of the Company in FGILICL as at 31st March 2015.

2.6 Pursuant to the enactment of the Companies Act 2013 (the ''Act''), the Company has, effective 1st April 2014, reviewed and revised the estimated useful life of its fixed assets, in accordance with the provisions of Schedule II to the Act. The carrying amount of the assets as on that date has been depreciated over the remaining useful life of the assets as per Schedule II of the Companies Act, 2013. Consequently, depreciation for the year is higher by Rs. 431,067. Further, an amount of Rs. 181,804 (net of deferred tax of Rs. 93,615) has been recognized in the Surplus in the statement of profit and loss, where the remaining useful life of such assets is Nil as at 1st April, 2014 in line with the provisions of Schedule II to the Act.

2.7 The Company is in the process of appointing a Chief Financial Officer as key managerial personnel.

2.8 Previous year''s figures have been regrouped/reclassified wherever necessary to correspond with the current year classification / disclosure.


Mar 31, 2014

1.1 Corporate Information

Industrial Investment Trust Limited (the Company) is a Public company incorporated under the provisions of the Companies Act, 1956. The Company is a Systemically Important Non-Deposit taking Non-Banking Financial Company registered with the Reserve Bank of India. The Company has been classified as an Investment Company.

2.1 Contingent liabilities and commitments not provided for

Particulars As at As at 31st March 31st March 2014 2013 (i) Contingent liabilities:

(a) Claims against the Company not acknowledged as debt

- Disputed income-tax matters in appeal 1,31,01,449 1,18,63,325

- Disputed wealth-tax matter in appeal 32,50,246 32,50,246 In respect of above items, outflow of resources would depend upon the outcome of the appeal.

(b) Guarantees

Guarantees given to banks on behalf of associate company 25,34,00,000 25,34,00,000

The Company has received counter-guarantees from other parties amounting to Rs. 190,050,000 (previous year Rs. 190,050,000) against the aforesaid guarantees given by the Company to the banks.

(ii) Commitments:

(a) Other Commitments

Non-cancellable contractual commitments - See Note 2.24

2.3 Employee Benefits

(a) Defined Contribution Plan

Contribution to defined contribution plan, recognised in the Statement of Profit and Loss under Contribution to provident fund and other funds in Note 2.16 for the year are as under:

(b) Defined Benefit Plan

The Company offers its employees defined-benefit plan in the form of a Gratuity Scheme. Benefits under the defined benefits plan are typically based on years of service and the employees compensation covering all regular employees. Commitments are actuarially determined at year-end. The benefits vests upon completion of five years of continuous service and once vested it is payable to employees on retirement or on termination of employment. The Company makes annual contribution to the group gratuity scheme administered by the Life Insurance Corporation of India.

Note: The Company is unable to obtain the details of major category of plan assets from the insurance company (Life Insurance Corporation of India) and hence the disclosure thereof is not made.

vi a. The estimate of rate of escalation in salary considered in actuarial valuation takes into account inflation, seniority, promotion and other relevant factors including supply and demand in the employment market.

b. The discounting rate is considered based on market yield on government bonds having currency and terms consistent with the currency and terms of the post-employment benefit obligations.

c. Expected rate of return on assets is determined based on expectation of the average long term rate of return expected on

2.4 Related party disclosures:

(i) Names of related parties:

(a) Names of related parties and nature of related party relationship where control exists are as under: Subsidiary companies:

NT Investrust Limited

IITL Projects Limited

IIT Insurance Broking and Risk Management Private Limited

IIT Media and Entertainment Private Limited

Joint venture:

Future Generali India Life Insurance Company Limited (w.e.f. 17th December, 2013)

(b) Names of other related parties and nature of relationship where there are transactions with related parties: Key management personnel: Dr. B. Samal, Executive Chairman

Associate company: World Resort Limited (w.e.f. 28th August, 2012)

Entities over which the company

can exercise significant influence:

IITL Nimbus The Express Park View - a partnership firm

IITL Nimbus The Palm Village - a partnership firm

IITL Nimbus The Hyde Park Noida -a partnership firm

Capital Infraprojects Private Limited

MRG Hotels Limited (w.e.f. 28th August, 2012)

2.5 Details of leasing arrangements

The Company has taken an office premise and residential premise on operating lease. There are no restrictions imposed by the lease arrangement. There are no sub-leases. The lease rental expense recognised in the Statement Profit and Loss for the year is Rs.1,824,367 (previous year: Rs.962,700). [net of recoveries Rs.1,000,000 (previous year: Rs. 1,320,000)]

The future minimum lease payments under non-cancellable operating leases for each of the following periods:

Note: The Company has given unsecured short term loans to its subsidiary and joint ventures of that subsidiary engaged in real estate business of construction of residential complexes which are not covered by the above mentioned categories. The outstanding balance of such loans is Rs. 650,000,000 (Previous year Rs. 527,500,000).

Note:

The above maturity pattern of assets and liabilities has been prepared by the Company after taking into consideration structural liquidity guidelines for assets-liabilities management (ALM) system in non-banking financial companies issued by RBI, best practices and best estimate of the Assets-Liability Committee with regard to the timing of various cash flows, which has been relied upon by the auditors.

2.27 The Company is engaged in Investment activities and in Insurance business undertaken through the joint venture company FGILICL. Hence there are two reportable business segments as per Accounting Standard-17 Segment Reporting notified by the Companies (Accounting Standards) Rules, 2006. The Company operates only in one geographical segment i.e. India.

The segment information has been provided in the consolidated financial statements.

2.28 The Company had entered into Share Purchase Agreement with Pantaloon Retail India Limited (now known as Future Retail Limited) to acquire 22.5% of its equity stake in Future Generali India Life Insurance Company Ltd (FGILICL). Pursuant to approval received from CCI, RBI & IRDA the transaction was consummated on December 17, 2013 for a total consideration of? 340 crores. FGILICL has now become a joint venture of the Company.

The management views the investment in positive light as insurance industry plays a crucial role in the growth and development of the overall economy. There is a huge potential to be tapped across India for not only life but also micro insurance. Life Insurance Industry has a long gestation period and the Company views this as a long term investment. Having regard to this and the projections made by FGILICL, the management of the Company is of the view that, although the networth of FGILICL as at March 31, 2014 has substantially eroded, there is no diminution other than temporary in the value of investment of the Company in FGILICL as at March 31, 2014.

2.29 Previous year''s figures have been regrouped/reclassified wherever necessary to correspond with the current year classification/ disclosure.


Mar 31, 2013

1.1(a) The Company has taken an offce premise on operating lease. The lease term is on the basis of the agreement entered into with the landlord. There are no restrictions imposed by the lease arrangement. There are no sub leases. The lease rental expense recognised in the Statement Proft and Loss for the year Rs. 962,700 (previous year: Rs. 1,520,015). [net of recoveries Rs. 1,320,000 (previous year: Rs. 2,683,694)]

The future minimum lease payments under non-cancellable operating leases for each of the following periods:

1.2 Contingent liabilities not provided for in respect of

(a) Taxation

Particulars As at As at 31st March, 2013 31st March, 2012

(a) Disputed income-tax matters in appeal 11,863,325 11,863,325

(b) Disputed wealth-tax matter in appeal 3,250,246 3,250,246

In respect of above items, outfow of resources would depend upon the outcome of the appeal.

(b) Guarantees

Guarantees given to banks on behalf of third party. 253,400,000 353,400,000

The Company has received counter-guarantees from other parties amounting to Rs. 190,050,000 against the aforesaid guarantees given by the Company to the banks.

1.3 Related party disclosures:

(i) Names of related parties:

(a) Names of related parties and nature of related party relationship where control exists are as under:

Subsidiary companies: IIT Investrust Limited

IITL Projects Limited

IIT Insurance Broking and Risk Management Private Limited IIT Media and Entertainment Private Limited

Associate company: World Resort Limited (w.e.f. 28th August, 2012)

(b) Names of other related parties and nature of relationship where there are transactions with related parties: Key management personnel: Dr. B. Samal, Executive Chairman

Entities over which IITL Projects Limited,

a subsidiary company, can exercise

signifcant infuence: IITL Nimbus The Express Park View - a partnership frm

IITL Nimbus The Palm Village - a partnership frm IITL Nimbus The Hyde Park Noida - a partnership frm Captial Infraprojects Private Limited

1.4 Since the Company has disclosed segment information in the consolidated accounts the same have not been disclosed in the aforesaid fnancial statements in terms of Para. 4 of Accounting Standard (AS) 17 on Segment Reporting as notifed under The Companies (Accounting Standards) Rules, 2006.

1.5 Previous year''s fgures have been regrouped/reclassifed wherever necessary to correspond with the current year classifcation/ disclosure.


Mar 31, 2012

1. Defined Contribution Plan:

The eligible employees of the Company are entitled to receive post employment benefits in respect of provident and family pension fund, in which both employees and the Company makes monthly contributions at a specified percentage of the employees' eligible salary (currently 12% of employees' eligible salary). The contributions are made to Employees Provident Fund Organisation. Provident Fund and Family Pension Fund are classified as Defined Contribution Plans as the Company has no further obligation beyond making the contribution. The Company's contributions to Defined Contribution Plan are charged to Statement of Profit and Loss as incurred.

2. Defined Benefit Plans:

i. Gratuity

The Company has an obligation towards gratuity, a defined benefit retirement plan covering eligible employees. The plan provides a lump sum payment to vested employees at retirement, death while in employment or on termination of employment of an amount equivalent to 15 days salary payable for each completed year of service. Vesting occurs upon completion of five years of service. The Company makes contribution to LIC of India based on an independent actuarial valuation made at the year-end. Actuarial gains and losses are recognised in the Statement of Profit and Loss.

ii. Compensated absences

The Company provides for the encashment of leave or leave with pay subject to certain rules. The Employees are entitled to accumulate leave subject to certain limits for future encashment/availment. The Company makes provision for compensated absences based on an actuarial valuation carried out at the end of the year. Actuarial gains and losses are recognised in the Statement of Profit and Loss.

3. Contingent liabilities not provided for in respect of

(a) Taxation

Particulars As at As at 31st March, 2012 31st March, 2011

(a) Disputed income-tax matters in appeal 11,863,325 17,120,115

(b) Disputed wealth-tax matter in appeal 3,250,246 3,250,246

In respect of above items, outflow of resources would depend upon the outcome of the appeal.

Guarantees given to banks on behalf of third party. 353,400,000 -

(c) Intial Margin on Equity Stock Futures paid in cash as at 31st March, 2012 Rs. Nil (previous year Rs. 1,050,000)

4. Since the Company has disclosed segment information in the consolidated accounts the same have not been disclosed in the aforesaid financial statements in terms of Para. 4 of Accounting Standard (AS) 17 on Segment Reporting as notified under The Companies (Accounting Standards) Rules, 2006.

5. The Revised Schedule VI has become effective from 1st April, 2011 for the preparation of financial statements. This has significantly impacted the disclosure and presentation made in the financial statements. Previous year's figures have been regrouped/reclassified wherever necessary to correspond with the current year classification/disclosure.


Mar 31, 2011

1) Contingent liabilities not provided for in respect of:

Particulars 31st March, 2011 31st March, 2010

Rs. Rs.

(a) Disputed income-tax matters in appeal. 17,120,115 24,684,042

(b) Disputed wealth-tax matter in appeal. 3,250,246 3,250,246 In respect of above items, outflow of resources would depend upon the outcome of the appeal.

2) Related party disclosures:

(i) (a) Names of related parties and nature of related party relationship where control exists are as under:

Holding Company : N. N. Financial Services Private Limited

Subsidiary companies : IIT Investrust Limited

IITL Projects Limited (Formerly known as Indo Green Projects Limited)

IIT Insurance Broking and Risk Management Private Limited

IIT Media and Entertainment Private Limited. (w.e.f. 15.04.2010)

(b) Names of other related parties and nature of relationship where there are transactions with related parties:

Key management personnel : Dr. B. Samal, Executive Chairman

Company in which directors have significant influence : Nimbus Projects Limited (Formerly known as NCJ International Limited)

3) There are no amounts due to the suppliers covered under the Micro, Small and Medium Enterprises Development Act, 2006; this information takes into account only those suppliers who have responded to the enquiries made by the Company for this purpose. This has been relied upon by the auditors.

4) The Company has taken an office premise on operating lease. The lease term is on the basis of the agreement entered into with the landlord. The agreement provides for increase in rent. There are no restrictions imposed by the lease arrangement. There are no sub leases. The lease rental expense recognised in the Profit and Loss Account for the year Rs.1,497,726/- (previous year: Rs.759,000). [net of recoveries Rs.2,607,186/- (previous year: Rs.1,200,000)]

vi a. The estimates of rate of escalation in salary considered in actuarial valuation take into account inflation, seniority, promotion and other relevant factors including supply and demand in the employment market.

b. The discounting rate is considered based on market yield on government bonds having currency and terms consistent with the currency and terms of the post-employment benefit obligations.

c. Expected rate of return on assets is determined based on expectation of the average long term rate of return expected on investments of the fund during the estimated term of the obligations.

viii The above information is as certified by the actuary and relied upon by the auditors.

(b) Initial margin on Equity Stock Futures has been paid in cash.

(5) Since the Company has disclosed segment information in the consolidated accounts the same have not been disclosed in the aforesaid financial statements in terms of Para. 4 of Accounting Standard (AS) 17 on Segment Reporting as notified under The Companies (Accounting Standards) Rules, 2006.

(6) Out of total 10,000,000 (previous year: 10,000,000) Equity shares, 5,112,960 (previous year: 5,112,960) Equity shares are held by the Holding Company N. N. Financial Services Private Limited.

(7) The figures relating to the previous year have been regrouped wherever necessary.


Mar 31, 2010

31st March, 31st March, 2010 Rs. 2009 Rs.

(1) Contingent liabilities not provided for in respect of

(a) Disputed income-tax matters in appeal. 24,684,042 24,684,042

(b) Disputed wealth-tax matter in appeal. 3,250,246 3,250,246

In respect of above items, outflow of resources would depend upon the outcome of the appeal.

(2) Basic earnings per share has been calculated by dividing profit after tax attributable to equity shareholders by the weighted average number of equity shares outstanding during the year. The Company has not issued any potential equity shares and accordingly, the basic earnings per share and diluted earnings per share are the same. Values used in calculating earnings per share are as under

(3) Related party disclosures:

(i) (a) Names of related parties and nature of related party relationship where control exists are as under:

Subsidiary companies : IIT Investrust Limited

Indo Green Projects Limited

IIT Insurance Broking and Risk Management Pvt. Limited

(b) Names of other related parties and nature of relationship where there are transactions with related parties:

Key management personnel : Dr. B. Samal, Executive Chairman

Companies in which directors have significant influence: N.N. Financial Services Pvt. Limited.

NCJ international Limited

(4) There are no amounts due to the suppliers covered under the Micro, Small and Medium Enterprises Development Act, 2006;this information takes into account only those suppliers who have responded to the enquiries made by the Company for this purpose. This has been relied upon by the auditors.

vi. a. The estimates of rate of escalation in salary considered in actuarial valuation take into accountinflation, seniority, promotion and other relevant factors including supply and demand in the employment market.

b. The discounting rate is considered based on market yield on government bonds having currency and terms consistent with the currency and terms of the post-employment benefit obligations.

c. Expected rate of return on assets is determined based on expectation of the average long term rate of return expected on investments of the fund during the estimated term of the obligations.

Accounting Standard (AS) 15 (Revised) on Employee Benefits notified by The Companies (Accounting Standards) Rules, 2006 requires the disclosure of the above information for the past four years; however the information is available only since the date of implementing the Standard.

viii The above information is as certified by the actuary and relied upon by the auditors.

(10) Since the Company has disclosed segment information in the consolidated accounts the same have not been disclosed in the aforesaid financial statements in terms of para. 4 of Accounting Standard (AS) 17 on Segment Reporting as notified under The Companies (Accounting Standards) Rules, 2006.

(5) The figures relating to the previous year have been regrouped wherever necessary.