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Notes to Accounts of Pilani Investment and Industries Corporation Ltd.

Mar 31, 2015

1. Capital & Other Commitments :

a) Uncalled liability on partly paid Shares held as Investments Rs. 3 thousands (Rs. 3 thousands).

2. Contingent Liabilities :

Income Tax demands for earlier years aggregating to Rs. 36,149 thousands (Rs. 33,642 thousands) disputed by the Company.

3. The Company has disputed the claim for recovery of Rs. 1,544 thousands plus interest from 1st November, 1973 made by State Bank of India, Bombay in a suit filed against the company on the basis of guarantee given in respect of the advances made to Hind Cycles Limited against their Cash Credit Account by the said Bank. Against the above claim, Rs. 6,928 thousands have been deposited with Debts Recovery Appellate Tribunal pursuant to Hon'ble Bombay High Court Order while admitting the writ petition filed by the Company. Pending the High Court judgment in the above matter, no provision against the above claim has been made in the accounts.

4. The Company has given undertaking to some Banks/Financial Institutions for non-disposal of its share holdings in the following Bodies Corporate without their approval, till the loans given by those banks/institutions are repaid in full by these Bodies Corporate :-

(i) Aditya Birla Chemicals (India) Ltd. (ii) Tanfac Industries Ltd.

(iii) Mangalam Cement Ltd. (iv) Century Textiles & Industries Ltd.

(v) Kesoram Industries Ltd.

B. Defined Benefit Plan

The Company has a defined benefit gratuity plan. Every employee who has completed five years or more of service gets Gratuity on terms not lower than the amount payable under the Payment of Gratuity Act, 1972. The aforesaid scheme is not funded. The following tables summarizes the components of net benefit expenses recognized in Statement of Profit & Loss and the amount recognized in the Balance Sheet for the respective plan.

5. No effect has been given in the accounts in respect of the following Equity Shares received by way of fully paid Bonus Shares on shares not belonging to the Company and the same are being held in trust by the Company :

6. Segment Reporting :

The company has only one business segment viz. investment and related activities and its operations are also confined to one geographical segment i.e. India. As such, no further disclosure under Accounting Standard 17 "Segment Reporting" is required.

7. Related Party Disclosures

Names of related parties and related party relationship

a. Name of the related parties where control exists :

Subsidiary Companies PIC Properties Limited

PIC Realcon Limited Atlas Iron & Alloys Limited (in Liquidation)

b. Names of other related parties :

Associate Company Century Textile & Industries Limited

Kesoram Industries Limited

Key Management Personnel Shri R. A. Makharia (Executive Director)

Shri N. K. Baheti (CFO) (w.e.f. 29th Jan.'15) Shri R.S.Kashyap (C.S.)(w.e.f. 1st April'14)

Operating Lease : Company as a Lessor

The company has leased certain office on operating leases. The lease term is for 1-3 years and renewable thereafter. There is escalation clause in the lease agreements. The rent is not based on any contingencies. There are no restrictions imposed by lease arrangements. The leases are cancellable.

8. Minimum Alternative Tax (MAT) Credit entitlement of Rs. 324,958 thousand (after adjusting utilized during the current year Rs. 12,943 thousand), has not been recognized by the Company in the absence of convincing evidence to claim the above tax credit in future years.

9. The Investment of the Company has exceeded the limits as per the Concentration of Credit / Investment norms provided in paragraph 18 of Non-Banking Financial (Non Deposit Accepting or Holding) Companies prudential norms (Reserve Bank) Directions, 2007 (as amended) for which the Company has applied to the Reserve Bank of India ("RBI") seeking exemption from complying with the aforesaid norms up to 31st March, 2016. Also the Company has applied to RBI for its conversion from Non-Banking Financial Company to Core Investment Company.

10. Additional disclosure required by NBFC-ND-SI in terms of the notification issued by RBI on August 1, 2008, are as follows:

(b) The Company has no exposure to real estate sector, both direct and indirect

11. Previous year figures

Previous year's figures including those in brackets have been regrouped / rearranged where necessary to confirm the current year's figures.


Mar 31, 2014

1. Capital & Other Commitments :

a) Uncalled liability on partly paid Shares held as Investments Rs. 3 thousands

2. Contingent Liabilities :

Income Tax demands for earlier years aggregating to Rs. 33,642 thousands (Rs. 26,218 thousands) disputed by the Company.

3. The Company has disputed the claim for recovery of Rs. 1,544 thousands plus interest from 1st November, 1973 made by State Bank of India, Bombay in a suit filed against the company on the basis of guarantee given in respect of the advances made to Hind Cycles Limited against their Cash Credit Account by the said Bank. Against the above claim, Rs. 6,928 thousands have been deposited with Debts Recovery Appellate Tribunal pursuant to Hon''ble Bombay High Court Order while admitting the writ petition filed by the Company. Pending the High Court judgment in the above matter, no provision against the above claim has been made in the accounts.

4. The Company has given undertaking to some Banks/Financial Institutions for non-disposal of its share holdings in the following Bodies Corporate without their approval, till the loans given by those banks/institutions are repaid in full by these Bodies Corporate :-

(i) Aditya Birla Chemicals (India) Ltd. (ii) Tanfac Industries Ltd.

(iii) Aditya Birla Nuvo Ltd. (iv) Mangalam Cement Ltd.

(v) Century Textiles & Industries Ltd. (vi) Kesoram Industries Ltd.

B. Defined Benefit Plan

The Company has a defined benefit gratuity plan. Every employee who has completed five years or more of service gets Gratuity on terms not lower than the amount payable under the Payment of Gratuity Act, 1972. The aforesaid scheme is not funded. The following tables summarises the components of net benefit expenses recognised in Statement of Profit & Loss and the amount recognised in the Balance Sheet for the respective plan.

The estimates of future salary increases considered in actuarial valuation, take account of inflation, seniority, promotion and other relevant factor, such as supply and demand in the employment market.

5. No effect has been given in the accounts in respect of the following Equity Shares received by way of fully paid Bonus Shares on shares not belonging to the Company and the same are being held in trust by the Company :

6. Segment Reporting :

The company has only one business segment viz. investment and related activities and its operations are also confined to one geographical segment i.e. India. As such, no further disclosure under Accounting Standard 17 "Segment Reporting" is required.

7. Related Party Disclosures

a. Name of the related parties where control exists : Subsidiary Companies

PIC Properties Limited PIC Realcon Limited Atlas Iron & Alloys Limited (in Liquidation)

b. Names of other related parties :

Associate Company Century Textile & Industries Limited Kesoram Industries Limited (with effect from 27th June 2013)

Key Management Personnel Shri R. A. Makharia (Executive Director)

8. Based on the informations/documents available with the company, no creditor is covered under Micro, Small and Medium Enterprises Development Act, 2006. As a result, no interest provisions / payments have been made by the company to such creditors, if any, and no disclosures are made in these accounts.

9. Leases :

Operation Lease : Company as Lessee

The office premises is obtained on operating lease. The lease term is for 1-3 years and renewable for further period either mutually or at the option of the company. There is no escalation clauses in the lease agreemens. There are no restrictions imposed by lease arrangements. The leases are cancellable.

Operation Lease : Company as Lessor

The company has leased certain office on operating leases. The lease term is for 1-3 years and renewable thereafter. There is escalation clause in the lease agreements. The rent is not based on any contingencies. There are no restrictions imposed by lease arrangements. The leases are cancellable.

10.Minimum Alternative Tax (MAT) Credit entitlement of Rs. 3, 37,901 thousand (including Rs. 3,172 thousand for the year), has not been recognized by the Company in the absence of convincing evidence to claim the above tax credit in future years.

11. The Company had made an application to Reserve Bank of India (RBI) vide its letter dated 8th March, 2013 for conversion of the Company from a Non-Banking Financial Company (NBFC) to Core Investment Company (CIC) without accepting Public deposits based on the fact that the Company holds 90% of its net assets in group companies of which more than 60% of its net assets are invested in equity shares. Subsequently, RBI had returned the application for further compliance of certain matters. The Company is in the process of making fresh application for its conversion from NBFC to CIC, after complying with the additional matter. However, pending application/ approval, the investment of the Company have exceeded the limits as per concentration of credit/Investment Norms as provided in para-18 of Non- Banking Financial (Non - Deposit Accepting or Holding) Companies prudential norms (Reserve Bank) Direction 2007 (as amended) for which the Company has applied to the RBI seeking exemption from complying with aforesaid norms up to 31st March, 2015.

12. Additional disclosure required by NBFC-ND-SI in terms of the notification issued by RBI on August 1, 2008, are as follows :

(a) Capital to Risks Assets Ratio (CRAR)


Mar 31, 2013

1. Corporate information :

Pilani Investment and Industries Corporation Limited is a public company domiciled in India and incorporated under the provisions of the Companies Act, 1956. Its shares are listed on Madhya Pradesh stock exchange & Delhi Stock Exchange Association Limited in India. The company is engaged in carrying on the Business of non-banking financial institution without accepting public deposits.

2. Basis of Preparation :

The financial statements have been prepared to comply in all material respects with the accounting principles generally accepted in India, including mandatory Accounting Standards notified under the Companies (Accounting Standards) Rules, 2006 (as amended) and the relevant provisions of the Companies Act, 1956 and the directives prescribed by the Reserve Bank of India for Non-Banking Financial Companies under the historical cost convention and on an accrual basis. The accounting policies, in all material respects, applied by the Company and are consistent with those used in the previous year.

3. 1. Capital & Other Commitments :

a) Uncalled liability on partly paid Shares held as Investments 3 thousands ( 3 thousands).

b) For Commitments relating to lease arrangements, refer Note No. 28 below.

2. Contingent Liabilities :

Income Tax demands for earlier years aggregating to 26,218 thousands ( 8,909 thousands) disputed by the Company.

4. The Company has disputed the claim for recovery of 1,544 thousands plus interest from 1st November, 1973 made by State Bank of India, Bombay in a suit filed against the company on the basis of guarantee given in respect of the advances made to Hind Cycles Limited against their Cash Credit Account by the said Bank. Against the above claim, 6,928 thousands have been deposited with Debts Recovery Appellate Tribunal pursuant to Hon''ble Bombay High Court Order while admitting the writ petition filed by the Company. Pending the High Court judgment in the above matter, no provision against the above claim has been made in the accounts.

5. The Company has given undertaking to some Banks/Financial Institutions for non-disposal of its share holdings in the following Bodies Corporate without their approval, till the loans given by those banks/institutions are repaid in full by these Bodies Corporate :- (i) Aditya Birla Chemicals (India) Ltd. (ii) Tanfac Industries Ltd.

(iii) Aditya Birla Nuvo Ltd. (iv) Mangalam Cement Ltd.

(v) Century Textiles & Industries Ltd. (vi) Kesoram Industries Ltd.

6. Disclosure under Accounting Standard - 15 (Revised) on ‘Employee Benefits''.

( in 000s)

A. Defined Contribution Plan 2012-13 2011-12 Contribution to Provident Fund 494 443 Contrubution to superannuation Fund 90 368

B. Defined Benefit Plan

The Company has a defined benefit gratuity plan. Every employee who has completed five years or more of service gets Gratuity on terms not lower than the amount payable under the Payment of Gratuity Act, 1972. The aforesaid scheme is not funded.

The following tables summarises the components of net benefit expenses recognised in Statement of Profit & Loss and the amount recognised in the Balance Sheet for the respective plan.

Statement of Profit & Loss

Net employee benefit expense recognized in the employee cost :

7. No effect has been given in the accounts in respect of the following Equity Shares received by way of fully paid Bonus Shares on shares not belonging to the Company and the same are being held in trust by the Company :

8. Segment Reporting :

The company has only one business segment viz. investment and related activities and its operations are also confined to one geographical segment i.e. India. As such, no further disclosure under Accounting Standard 17 "Segment Reporting" is required.

9. Based on the informations/documents available with the company, no creditor is covered under Micro, Small and Medium Enterprises Development Act, 2006. As a result, no interest provisions / payments have been made by the company to such creditors, if any, and no disclosures are made in these accounts.

10. Information pursuant to the provisions of Revised Schedule VI to the Companies Act, 1956 (to the extent applicable) :–

Earnings in Foreign Exchange - Dividend (Net of Tax) NIL ( 277 thousands)

11. Leases :

Operation Lease : Company as Lessee

The office premises is obtained on operating lease. The lease term is for 1-3 years and renewable for further period either mutually or at the option of the company. There is no escalation clauses in the lease agreemens. There are no restrictions imposed by lease arrangements. The leases are cancellable.

The company has leased certain office on operating leases. The lease term is for 1-3 years and renewable thereafter. There is escalation clause in the lease agreements. The rent is not based on any contingencies. There are no restrictions imposed by lease arrangements. The leases are cancellable.

12. Current Tax for the year ended 31st March 2013 represents Minimum Alternate Tax (MAT) provided as per provisions of the Income Tax Act, 1961, however, MAT Credit entitlement of 334,730 thousands, has not been recognized by the Company in the absence of convincing evidence to claim the above tax credit in future years.

13. During the year ended 31st March 2013, the Company has sold certain quoted investment and the differences of 1,370,118 thousands, between the cost of such shares being the book value as on 31st March 2003, in terms of the scheme of arrangement approved by Hon''ble Calcutta High Court in an earlier years and net sale proceeds has been credited to the Statement of Profit & Loss. However, Investment Reserve of 303,916 thousands against the above shares has not been withdrawn and adjusted in the accounts, although the same has been duly considered for the purpose of Minimum Alternate Tax based on a legal opinion.

14. In terms of resolution passed by the Board of Directors in their meeting held on 9th November, 2012, the Company has transferred / sold certain quoted / unquoted investments of 44,325 thousands to its newly formed wholly owned subsidiary namely, PIC Realcon Limited during the year ended 31st March, 2013 at values appearing in the books of the Company.

15. The Company has made an application to Reserve Bank of India (RBI) vide its letter dated 8th March 2013 for its conversion from a Non Banking Financial Company (NBFC) to Core Investment Company (CIC) without accepting Public deposits,based on the fact the Company holds 90% of its net assets in group companies of which more than 60% of its net assets are invested in equity shares as per the audited interim financial statements as at 31st January, 2013. Accordingly, the Company has surrendered existing NBFC certificate with a request to cancel the same. The above application is pending with RBI as on date. However, pending above approval, the concentration of credit/Investment Norms as provided in Para-18 of Non-Banking Financial (Non-Deposit Accepting or holding) companies prudential norms (Reserve Bank) Direction 2007 (as amended) has exceeded the limits provided therein for which the Company has applied to the RBI seeking exemption from complying with aforesaid norms up to 31st March, 2014, or approval of conversion from NBFC to CIC, whichever is earlier.

16. The Company does not have any exposure in gold on March 31, 2013.

17. Additional disclosure required by NBFC-ND-SI in terms of the notification issued by RBI on August 1, 2008, are as follows :

(a) Capital to Risks Assets Ratio (CRAR)

(b) The company has no exposure to real estate sector, both direct and indirect.

18. Previous year figures

Previous year''s figures including those in brackets have been regrouped / rearranged where necessary to confirm the current year''s figures.


Mar 31, 2012

1. Corporate information :

Pilani Investment and Industries Corporation Limited is a public company domiciled in India and incorporated under the provisions of the Companies Act, 1956. Its shares are listed on two stock exchanges in India. The company is engaged in carrying on the Business of non-banking financial institution without accepting public deposits.

2. Basis of Preparation :

The financial statements have been prepared to comply in all material respects with the accounting principles generally accepted in India, including mandatory Accounting Standards notified under the Companies (Accounting Standards) Rules, 2006 (as amended) and the relevant provisions of the Companies Act, 1956 and the directives prescribed by the Reserve Bank of India for Non-Banking Financial Companies under the historical cost convention and on an accrual basis. The accounting policies, in all material respects, have been consistently applied by the Company and are consistent with those used in the previous year, except for the change in accounting policy explained in 2.1 (i) below.

(a)Terms /Rights attached to equity shares

The company has only one class of equity shares having a par value of Rs. 10 per share. Each holder of equity shares is entitled to one vote per share. The company declares and pays dividend in Indian Rupees.

During the year ended 31 st March 2012, the amount of per share dividend recognized as distributions to shareholders was Rs.25/- (Rs. 25) per share.

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

3.1. Capital & Other Commitments :

a) Uncalled liability on partly paid Shares held as Investments No.3 thousands 3 thousands).

b) For Commitments relating to lease arrangements, refer Note No. 30 below.

2. Contingent Liabilities :

Income Tax demands for earlier years aggregating to Rs.8,909 thousands (Rs. 3,941 thousands) disputed by the Company/ Income Tax department in appeal.

4. The Company has disputed the claim for recovery of 1,544 thousands plus interest from 1st November, 1973 made by State Bank of India, Bombay in a suit filed against the company on the basis of guarantee given in respect of the advances made to Hind Cycles Limited against their Cash Credit Account by the said Bank. Against the above claim, Rs. 6,928 thousands have been deposited with Debts Recovery Appellate Tribunal pursuant to Hon'ble Bombay High Court Order while admitting the writ petition filed by the Company. Pending the High Court judgment in the above matter, no provision against the above claim has been made in the accounts.

5. The Company has given undertaking to some Banks/Financial Institutions for non-disposal of its share holdings in the following Bodies Corporate without their approval, till the loans given by those banks/institutions are repaid in full by these Bodies Corporate

(i) Aditya Birla Chemicals (India) Ltd. (ii) Tanfac Industries Ltd.

(iii) Aditya Birla Nuvo Ltd. (iv) Mangalam Cement Ltd.

(v) Century Textiles & Industries Ltd. (vi) Kesoram Industries Ltd.

6. Disclosure under Accounting Standard -15 (Revised) on "Employee Benefits.

(Rs.in 000s)

A. Defined Contribution Plan 31st March 2012 31st March 2011

Contribution to Provident Fund 443 364

Contribution to superannuation Fund 368 306

B. Defined Benefit Plan

The Company has a defined benefit gratuity plan. Every employee who has completed five years or more of service gets Gratuity on terms not lower than the amount payable under the Payment of Gratuity Act, 1972. The aforesaid scheme is not funded.

The following tables summarizes the components of net benefit expenses recognized in Statement of Profit & Loss and the amount recognized in the Balance Sheet for the respective plan.

Statement of Profit & Loss Net employee benefit expense recognized in the employee cost :

7. The Competent Authority under Urban Land (Ceiling & Regulation) Act, 1976 has declared excess land of 329.25 sq.mtrs. in respect of land held by the Company at Kolkata and 1,486.87 sq.mtrs. in respect of land at New Delhi transferred to a subsidiary of the company w.e.f. 1.4.1985, against which a stay has been granted to the Company by the Appellate Authority under the said Act. Further in view of Urban Land (Ceiling & Regulation) Repeal Ordinance 1999 (No.5 of 1999) dated 11.1.1999, the Urban Land (Ceiling & Regulation) Act, 1976 stands repealed in New Delhi as advised to the company by the solicitors.

8. Segment Reporting :

The company has only one business segment viz. investment and related activities and its operations are also confined to one geographical segment i.e. India. As such, no further disclosure under Accounting Standard 17 "Segment Reporting" is required.

9. Based on the information's/documents available with the company, no creditor is covered under Micro, Small and Medium Enterprises Development Act, 2006. As a result, no interest provisions / payments have been made by the company to such creditors, if any, and no disclosures are made in these accounts.

10. Information pursuant to the provisions of Revised Schedule VI to the Companies Act, 1956 (to the extent applicable)

Earnings in Foreign Exchange - Dividend (Net of Tax) 277 thousands (NIL)

11. Leases:

Operation Lease : Company as Lessee

The office premises is obtained on operating lease. The lease term is for 1 -3 years and renewable for further period on mutual consent. There is no escalation clauses in the lease agreements. There are no restrictions imposed by lease arrangements. The leases are cancellable.

Operation Lease : Company as Less or

The company has leased certain office on operating leases. The lease term is for 1-3 years and thereafter renewable. There is escalation clause in the lease agreements. The rent is not based on any contingencies. There are no restrictions imposed by lease arrangements. The leases are cancellable.

12. As per Scheme of Arrangement sanctioned by Hon'ble Calcutta High Court in an earlier year, long-term investments are valued at cost, i.e. book value of the investments as reflected in the financial statements as on 31 st March, 2003 and for subsequent diminution, provision made by way of adjustment against Investment Reserve as indicated in Note No. 2.1 (ix) (b) above. There has been no impact on the profit for the current year and previous year due to above accounting treatment.

13. The Company does not have any exposure in gold on March 31,2012.

14. Previous year figures

Precious year's figures including those in brackets have been recognized where necessary to confirm the current year's classification under Revised Schedule VI as stated in Note 2.1 (i) above.

 
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