Mar 31, 2018
1(a) Corporate Information
Srei Infrastructure Finance Limited (the âCompanyâ) is a public limited company domiciled in India and incorporated under the provisions of the Companies Act, 1956. The Company is also a Public Financial Institution (PFI) notified under section 4A of the Companies Act, 1956. The Company received a Certificate of Registration from the Reserve Bank of India (âRBIâ) on 1st August, 1998 to commence / carry on the business of Non-Banking Financial Institution (âNBFIâ) and was subsequently classified as Infrastructure Finance Company vide Certificate of Registration dated 11th May, 2010.
2.1 Reconciliation of the Number of Equity Shares outstanding
The reconciliation of the number of equity shares outstanding and the corresponding amount thereof, as at the Balance Sheet date is set out below:
2.2 Rights, preferences and restrictions in respect of each class of shares
The Companyâs authorised capital consists of two classes of shares, referred to as Equity Shares and Preference Shares having par value of Rs. 10/- and Rs. 100/- each respectively. Each holder of equity shares is entitled to one vote per share. Preference Shareholder has a preferential right over equity share holders, in respect of repayment of capital and payment of dividend. However, no such preference shares have been issued by the Company during the year ended 31st March, 2018 and 31st March, 2017.
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 any of the remaining assets of the company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.
2.3 Shares allotted as fully paid-up without payment being received in cash / by way of bonus shares (during 5 years preceding 31st March, 2018)
The Company has not issued any shares without payment being received in cash / by way of bonus shares since 2012-13.
The Board has recommended a dividend of Rs. 0.50 per share on Equity Shares of the Company, subject to approval of the Members at the forthcoming Annual General Meeting.
3.1 Bond / Debenture Redemption Reserve
As per terms of Issue, Company creates Bond / Debenture Redemption Reserve (âDRRâ) towards redemption of Long-Term Infrastructure Bonds and Secured and Unsecured Non-Convertible Debentures issued through Public Issue, as statutorily required.
During FY 2017-18, Company has created DRR (net) to the extent of Rs. 4,769 Lacs (Previous year Rs. 1,097 Lacs) towards redemption of Long-Term Infrastructure Bonds and Secured and Unsecured Non-Convertible Debentures issued through Public Issue, as statutorily required.
4.1 Long-Term Infrastructure Bonds - Secured, Redeemable, Non-convertible Debentures
During the financial year 2011-12, the Company had raised fund through Public issue of Long-Term Infrastructure Bonds in the nature of Secured, Redeemable Non-Convertible Debentures, eligible for deduction under section 80 CCF of the Income-Tax Act, 1961. Fund raised has been utilised for the purposes of infrastructure lending as per terms in the year of the issue.
Bonds with interest rate of 8.90% have an overall tenure of 10 years and those with 9.15%, 15 years. Buyback option was available for all bonds at the end of 5 years i.e. on 22.03.2017 which had lapsed in the previous year. Bonds are secured by exclusive charge on specific receivables of the Company & pari-passu mortgage / charge on immovable property.
1 Secured against Receivables / Assets of the Company and mortgage of immovable property.
2 Secured against Mortgage of immovable property.
3 Secured against Receivables / Assets of the Company and mortgage of immovable property. NCDâs have an overall tenure of 7 years and having put / call option at the end of 5 years i.e. on 05-11-2017
4 Secured against Receivables / Assets of the Company and mortgage of immovable property. Due to cumulative Interest bonds wherein interest is payable on maturity, yield has been considered as rate of interest.
5 Secured against Receivables / Assets of the Company and mortgage of immovable property. Due to cumulative Interest bonds wherein interest is payable on maturity, yield has been considered as rate of interest. NCDâs have an overall tenure of 7 years and having put / call option at the end of 5 years i.e. on 05-11-2017.
6 Secured against Receivables / Assets of the Company and mortgage of immovable property. As interest rate during the tenor of bond is different i.e. Year 1:12.50% Year 2:12% Year 3:11.50% Year 4:11.25% Year 5:11.25%, interest rate for 1st year considered for disclosure.
7 Secured against Receivables / Assets of the Company and mortgage of immovable property. In case investor fall under individual category and who are holder of NCD(s) / Bond(s) previously issued by the Company in past public issues and / or are equity shareholder(s) of Company on the date of allotment, shall be eligible for additional coupon rate of 0.25% p.a. provided the NCD(s) / Bond(s) are held by investors on the relevant record date of interest payment.
8 Secured against Receivables / Assets of the Company and mortgage of immovable property. In case investor fall under individual category and who are holder of NCD(s) / Bond(s) previously issued by the Company in past public issues and/or are equity shareholder(s) of Company and / or senior citizens on the date of allotment, shall be eligible for additional coupon rate of 0.25% p.a. provided the NCD(s) / Bond(s) are held by the investors on the relevant record date of interest payment.
9 Secured against Receivables / Assets of the Company and mortgage of immovable property. In case investor fall under individual category shall be eligible for additional coupon rate of 0.25% p.a. Further, investor who are individual and who are holder of NCD(s) / Bond(s) previously issued by the Company in past public issues and/or are equity shareholder(s) of Company and / or senior citizens and/or employees of Company on the date of allotment, shall be eligible for additional coupon rate of 0.25% p.a. provided the NCD(s) / Bond(s) are held by the investors on the relevant record date of interest payment.
10 Secured against Receivables / Assets of the Company and mortgage of immovable property. Investor who are individual and who are holder of NCD(s) / Bond(s) previously issued by the Company in past public issues and/or are equity shareholder(s) of
Company and/ or senior citizens and / or employees of Company on the date of allotment, shall be eligible for additional coupon rate of 0.25% p.a. provided the NCD(s) / Bond(s) are held by the investors on the relevant record date of interest payment.
11 Secured against Receivables / Assets of the Company and mortgage of immovable property. Investor who are individual and who are holder of NCD(s) / Bond(s) previously issued by the Company and Srei Equipment Finance Limited, in past public issues and/ or are equity shareholder(s) of the Company and / or are Senior Citizens and/or are Employees of Srei Group (the Company and all its subsidiaries, sub-subsidiaries, associates and group companies), on date of allotment, shall be eligible for additional coupon of 0.25% p.a. provided the proposed NCDs are held by the Investors on the relevant record date of interest payment.
Funds raised Rs. 30,976 Lacs through public issue of Secured, Redeemable Non-Convertible Debentures have been utilised for the purposes as per the terms of the issue.
All the above debentures are redeemable at par.
1 Secured against Receivables / Assets of the Company and mortgage of immovable property.
2 Secured against Mortgage of immovable property.
3 Secured against Receivables / Assets of the Company and mortgage of immovable property. NCDâs have an overall tenure of 7 years and having put / call option at the end of 5 years i.e. on 05-11-2017
4 Secured against Receivables / Assets of the Company and mortgage of immovable property. Due to cumulative Interest bonds wherein interest is payable on maturity, yield has been considered as rate of interest.
5 Secured against Receivables / Assets of the Company and mortgage of immovable property. Due to cumulative Interest bonds wherein interest is payable on maturity, yield has been considered as rate of interest. NCDâs have an overall tenure of 7 years and having put/ call option at the end of 5 years i.e. on 05-11-2017.
6 Secured against Mortgage of immovable property. NCDâs have an overall tenure of 5 years and having put / call option at the end of 3 years i.e. on 08-06-2015.
7 Secured against Receivables/Assets of the Company and mortgage of immovable property. As interest rate during the tenor of bond is different i.e. Year 1:12.50% Year 2:12% Year 3:11.50% Year 4:11.25% Year 5:11.25%, interest rate for 1st year considered for disclosure.
8 Secured against Receivables / Assets of the Company.
9 Secured against Receivables / Assets of the Company and mortgage of immovable property. In case investor fall under individual category and who are holder of NCD(s)/Bond(s) previously issued by the Company in past public issues and/or are equity shareholder(s) of Company on the date of allotment, shall be eligible for additional coupon rate of 0.25% p.a. provided the NCD(s)/Bond(s) are held by investors on the relevant record date of interest payment.
10 Secured against Receivables / Assets of the Company and mortgage of immovable property. In case investor fall under individual category and who are holder of NCD(s) / Bond(s) previously issued by the Company in past public issues and/or are equity shareholder(s) of Company and/ or senior citizens on the date of allotment, shall be eligible for additional coupon rate of 0.25% p.a. provided the NCD(s) / Bond(s) are held by the investors on the relevant record date of interest payment.
11 Secured against Receivables / Assets of the Company and mortgage of immovable property. In case investor fall under individual category shall be eligible for additional coupon rate of 0.25% p.a. Further, investor who are individual and who are holder of NCD(s) / Bond(s) previously issued by the Company in past public issues and / or are equity shareholder(s) of Company and/ or senior citizens and/or employees of Company on the date of allotment, shall be eligible for additional coupon rate of 0.25% p.a. provided the NCD(s) / Bond(s) are held by the investors on the relevant record date of interest payment.
12 Secured against Receivables / Assets of the Company and mortgage of immovable property. Investor who are individual and who are holder of NCD(s) / Bond(s) previously issued by the Company in past public issues and/or are equity shareholder(s) of Company and / or senior citizens and/or employees of Company on the date of allotment, shall be eligible for additional coupon rate of 0.25% p.a. provided the NCD(s) / Bond(s) are held by the investors on the relevant record date of interest payment.
13 Secured against Receivables / Assets of the Company and mortgage of immovable property. Investor who are individual and who are holder of NCD(s) / Bond(s) previously issued by the Company and Srei Equipment Finance Limited, in past public issues and/ or are equity shareholder(s) of the Company and/or are Senior Citizens and/or are Employees of Srei Group (the Company and all its subsidiaries, sub-subsidiaries, associates and group companies), on date of allotment, shall be eligible for additional coupon of 0.25% p.a. provided the proposed NCDs are held by the Investors on the relevant record date of interest payment.
Funds raised Rs. 62,854 Lacs through public issue of Secured, Redeemable Non-Convertible Debentures have been utilised for the purposes as per the terms of the issue.
All the above debentures are redeemable at par.
The above Term Loans are secured by charge on specific assets covered by loan / lease agreements with customers and / or receivables arising therefrom.
1 Includes loans of Rs. Nil (Previous year: Rs. 2,425 Lacs) guaranteed by Export Import Bank of the United States.
4.2 Unsecured Subordinated bonds / debentures (Tier II Capital)
During the year, the Company raised subordinated debt qualifying for Ter II capital amounting to Rs. 2,702 Lacs (Previous year: Rs. Nil) and the same have been utilised for the purposes as per the terms of the issue. The following table sets forth the details of the outstanding:
5. DEFERRED TAX LIABILITIES (Net)
In terms of Accounting Standard 22, the net Deferred Tax Liability (DTL) reversed during the year is Rs. 1,360 Lacs (Previous year: Rs. 241 Lacs). Consequently, the net DTL as at year-end stands at Rs. 8,742 Lacs (Previous Year Rs. 10,102 Lacs). The break-up of major components of net DTL is as follows:
6.1 Nature of certain provisions and their movement
Provision for Bad Debts and Advances is made in the financial statements according to the Prudential Norms prescribed by RBI for NBFCs. The Company also makes additional provision based on the managementâs best estimate, to the extent considered necessary.
The Company creates a general provision at 0.40% of the standard assets outstanding on the balance sheet date, as per the RBI Prudential Norms.
The following table sets forth the movement of aforesaid Provisions:
7.1 Working capital facilities from banks, including working capital demand loans earmarked against such facilities, are secured by hypothecation of underlying assets (short-term as well as long-term loan assets) covered by hypothecation loan and operating lease agreements with customers and receivables arising therefrom, ranking pari passu (excluding assets specifically charged to others). As per the prevalent practice, these facilities are renewed on a year-to-year basis and therefore, are revolving in nature.
7.2 Face value of Commercial Paper outstanding as at 31st March, 2018 is Rs. 81,910 Lacs (Previous year Rs. 38,410 Lacs). Face value of maximum outstanding at any time during the year was Rs. 1,39,830 Lacs (Previous year Rs. 1,22,940 Lacs). Face value of Commercial Paper repayable within one year is Rs. 81,910 Lacs (Previous year Rs. 38,410 Lacs).
7.3 The above foreign currency buyerâs credit from banks are repayable by bullet payment and have tenure of upto 1 year. These loans are secured by import documents covering title to capital goods and extension of pari passu charge towards working capital facilities.
8.1 To be credited to Investor Education and Protection Fund as and when due.
8.2 In order to qualify for registration as an âInfrastructure Finance Companyâ, the Company decided not to accept or renew public deposits w.e.f. 20th April, 2010. The amount of public deposits outstanding as on 19th April, 2010 (including matured and unclaimed deposits) along with accrued and future interest thereof is kept in the form of a Fixed Deposit, under lien, with Axis Bank Limited, a scheduled commercial bank, for the purpose of making payment to the depositors. The outstanding balance of the Fixed Deposit as at 31st March, 2018 is Rs.1 Lac (Previous year: Rs. 25 Lacs).
Sahaj is a long-gestation rural distribution & e-governance initiative and due to the accumulated losses, itâs net worth has eroded as at 31st March, 2018. However, Sahaj has informed the Company that it has taken a number of steps as part of a revamped business plan viz. substantial cost rationalisation, business expansion in new geographies and introduction of newer services etc., and its performance is expected to improve significantly over the coming years and that it shall continue to be a going concern in the foreseeable future.
Considering the long-term strategic nature of the investment and also in view of the revamped business plan of Sahaj as enumerated above, no provision is considered necessary by the Company at present, for any diminution in the value of investment and against loans advanced to Sahaj.
1 Secured by underlying assets and in certain cases are additionally secured by immovable properties and / or pledge of equity shares of the borrowers by way of collateral security.
2 a Loans to Others includes assets aggregating Rs. 1,72,541 Lacs (Previous year Rs. 71,176 Lacs) acquired in satisfaction of debt and held for sale.
b In terms of an Order from DRT-I, Kolkata dated 24 December, 2014, Deccan Chronicle Holding Limited (DCHL), one of the borrowers of the Company, had in the financial year 2014-15 allotted to the Company 6,60,37,735 equity shares in DCHL pursuant to conversion of a portion of loan into equity shares by virtue of the Companyâs rights under the financial documents. However, during the corporate insolvency resolution process under the Insolvency and Bankruptcy Code, 2016 of DCHL, the Company has come to know that the said allotment of 6,60,37,735 equity shares by DCHL was contrary to law and therefore, void and ineffective. Since DCHL failed to give effect to such conversion, the Company has irrevocably and unconditionally withdrawn its right of conversion of loan into equity shares of DCHL vide its letter dated 23 April, 2018 to Resolution Professional of DCHL.
3 Includes Non-Performing Assets of Rs. 55,582 Lacs (Previous year Rs. 55,880 Lacs).
9. EARNINGS IN FOREIGN CURRENCY
Earnings in foreign currency for the year ended 31st March, 2018 is Rs. Nil (Previous year Rs. Nil )
10. DIVIDEND REMITTED IN FOREIGN CURRENCIES
The company remits the equivalent of the dividend payable to equity shareholders and holders of GDRs. For GDR holders, the dividend is remitted in Indian rupees to the custodian bank.
11. The Company has entered into Options / Swaps / Forward contracts (being derivative instruments) which are not intended for trading or speculation, for the purpose of hedging currency and interest rate related risks. Options, Swaps and Forward contracts outstanding as at year end are as follows:
11.1 The Company with effect from 1st April 2016 (referred to as âTransition dateâ) has applied the Guidance Note on Accounting for Derivative Contracts issued by the Institute of Chartered Accountants of India (ICAI) (herein after referred to as âGuidance Noteâ) which is applicable for all derivative contracts other than those covered by an existing notified Accounting Standard (AS) like forward contracts (or other financial instruments which in substance are forward contracts covered) which is covered by AS 11. Further, the said Guidance Note applies to all derivative contracts covered by it and are outstanding as on the transition date with the cumulative impact (net of taxes) as on the transition date recognized in reserves as a transition adjustment and disclosed separately.
11.2 Overall financial risk management objective and policies
Asset Liability Committee (ALCO) manages the Foreign Currency and Interest Rate Risks, besides other market risks / core functions. The company has put in place the policies for hedging / mitigating risks / strategies and processes for continuous monitoring of risks, which will enable the company to quantify risk, both on account of Foreign Currency and Interest Rate Risks. Apart from ALCO there is a Risk Committee of the Board which guides the company in these risks. Risk is measured on the basis of Fair Value as on reporting date. The Board has delegated authority to company officials in the FX Treasury department for entering into Generic derivative products besides Forward Contracts, on behalf of the company, to hedge the Foreign Currency and Interest Rate Risk exposures. The company has a Risk Management Policy which paves the way for risk reporting and risk monitoring systems. The marked-to-market values are obtained from the banks with whom the hedge deals are done. The Company, in order to hedge itself against the adverse impact of fluctuations in foreign currency rates / variable interest benchmark (LIBOR) on underlying liability, enters into the derivative contracts. The Company does not enter into derivative contracts for speculation purposes.
11.3 Methodology used to arrive at the fair value of the derivative contracts
In estimating the fair value of derivative, the Company obtains the marked-to-market values from the banks with whom the hedge deals are done. The fair value gains / losses recognized in the statement of profit and loss and in hedge reserve (equity) are disclosed as follows:
11.4 Hedge accounting relationship
The Company designates derivatives instruments in respect of foreign currency risk and interest rate risk as cash flow hedges. At the inception of the hedge relationship, the Company documents the relationship between the hedging instrument and the hedged item, along with its risk management objectives and its strategy for undertaking various hedge transactions. Furthermore, at the inception of the hedge and on an ongoing basis, the Company documents whether the hedging instrument is highly effective in offsetting changes in cash flows of the hedged item attributable to the hedged risk.
12. LEASES
a. In the capacity of Lessee
(i) The Company has certain cancellable operating lease arrangements for office premises and equipments, which range between 11 months to 15 years and are usually renewable by mutual consent, on mutually agreeable terms. Some of these lease agreements have rent escalation upto 5% p.a. or 10% p.a. on renewals. Lease payments charged to the Statement of Profit and Loss with respect to such leasing arrangements aggregate to Rs. 866 Lacs (Previous year Rs. 828 Lacs).
Contingent rent recognised for agreements which stipulate rent payment based on usage is Rs. Nil (Previous year Rs. 11 Lacs).
(ii) Further, the Company had certain non-cancellable operating lease arrangements for office premises, which was of 21 years and was renewable by mutual consent on mutually agreeable terms. Based on mutual understanding between parties, the agreement was terminated during the year. In respect of such arrangements, lease payments for the year aggregating to Rs.4 Lakhs (Previous year Rs.8 Lakhs) have been recognised in the Statement of Profit and Loss.
The future lease payments in respect of the above non-cancellable operating leases are as follows:
(iii) Sub lease payments received (or receivable) recognised in the Statement of Profit and Loss for the year is Rs. 1,333 Lacs (Previous year Rs. 2,981 Lacs). Future minimum sublease payments expected to be received under non-cancellable subleases is Rs. 875 Lacs (Previous year Rs. 587 Lacs).
b. In the capacity of Lessor
(i) The Company has given assets on Operating lease (refer Note No. 12) for periods ranging between 5 to 15 years. Some of these lease agreements stipulate rental computation on the basis of earnings of the Lessee. Such contingent rent recognised during the year is Rs. 3,173 Lacs (Previous year Rs. 501 Lacs).
(ii) The Company also has cancellable operating lease arrangements for office premises, which range between 1 to 3 years and are usually renewable by mutual consent on mutually agreeable terms. Further, the Company has non-cancellable arrangement which is of 3 years and is renewable by mutual consent on mutually agreeable terms. In respect of non-cancellable arrangements, lease earning for the year aggregating to Rs. 2 Lacs (Previous year Rs. 1 Lac) have been recognised in the Statement of Profit and Loss.
13. DISCLOSURE PURSUANT TO ACCOUNTING STANDARD (AS) 15 - EMPLOYEE BENEFITS
The trustees of the gratuity scheme for the employees of the Company have entrusted the administration of the scheme to the Life Insurance Corporation of India (LIC).
(a) Expenses recognised in the Statement of Profit and Loss are as follows:
(b) Net Liability recognised in the Balance Sheet is as follows:
(c) Changes in the present value of the defined benefit obligations are as follows:
(d) The details of fair value of plan assets at the Balance Sheet date are as follows:
(e) The principal assumptions used in determining the gratuity and leave liability are as shown below:
(f) The amounts for the current and previous years are as follows:
(g) The estimate of future salary increase, considered in actuarial valuation, takes account of inflation, seniority, promotion and other relevant factors such as supply and demand in the employee market.
(h) The amount provided for defined contribution plan is as follows:
14. Information as required by Non-Banking Financial Company - Systemically Important Non-Deposit taking Company and Deposit taking Company (Reserve Bank) Directions, 2016 is furnished vide Annexure - II attached herewith.
15. Figures pertaining to the previous year have been rearranged / regrouped, wherever necessary, to make them comparable with those of current year.
16. Disclosures on Risk Exposure in Derivatives (i) Qualitative Disclosure
The structure and organization for management of risk in derivatives trading, is not applicable since the Company is not engaged in derivative trading.
Besides other market risks / core functions, Asset Liability Committee (ALCO) manages the Foreign Currency and Interest Rate Risks also. The company has put in place the policies for hedging / mitigating risks / strategies and processes for continuous monitoring of risks, which will enable the company to quantify risk, both on account of Foreign Currency and Interest Rate Risks. Apart from ALCO there is a Risk Committee of the Board which guides the company in these risks.
The Board has delegated authority to company officials in the Forex Treasury department for entering into Generic derivative products besides Forward Contracts, on behalf of the company, to hedge the Foreign Currency and Interest Rate Risk exposures.
The company has a Market Risk Policy which paves the way for risk reporting and risk monitoring systems. The marked-to-market values are obtained from the banks with whom the hedge deals are done.
The Company, in order to hedge itself against the adverse impact of fluctuations in foreign currency rates / variable interest benchmark on underlying liability, enters into derivative contracts. Derivate contracts which are covered under AS 11, are accounted for as per the aforesaid policy for Foreign Currency Transactions and Translations.
The Company does not enter into derivative contracts for speculation or trading purposes. In accordance with the Guidance Note on Accounting for Derivatives (âGuidance Noteâ) issued by the Institute of Chartered Accountants of India, the Company has classified derivative contracts (not covered under AS 11) as a hedging instrument and adopted cash flow hegde accounting model. The hedging instrument is measured at fair value, but any gain or loss that is determined to be an effective hedge is recognised in cash flow hedge reserve and recycled to the statement of profit & loss to offset the gains and losses of the hedged items.
The premium or discount arising at the inception of forward exchange contracts is amortised as expense or income over the life of the respective contracts. Exchange differences on such contracts are recognised in the Statement of Profit and Loss in the year in which the exchange rates change. Any profit or loss arising on cancellation or renewal of forward exchange contract is recognised as income or expense in the year in which it is cancelled or renewed.
17. Details of Single Borrower Limit (SGL) / Group Borrower Limit (GBL) exceeded by the applicable NBFC
The Company has not exceeded the Prudential exposure limits during the current year and previous year in respect of exposure towards single borrower and group of borrowers.
18. Unsecured Advances
Unsecured advance as at 31st March, 2018 is Rs. 27,302 lacs (Previous year Rs. 59,314 lacs) and it includes advances amounting to Rs. Nil (Previous year Rs. Nil) for which intangible securities such as charge over rights, licences, authority, etc., has been taken as collateral.
19. Registration obtained from other financial sector regulators
The Company received a Certificate of Registration from the Reserve Bank of India (âRBIâ) on 1st August, 1998 to commence / carry on the business of Non-Banking Financial Institution (âNBFIâ) and was subsequently classified as Infrastructure Finance Company vide Certificate of Registration dated 11th May, 2010. The Company is also a Public Financial Institution (PFI) notified under section 4A of the Companies Act, 1956.
20. Disclosure of Penalties imposed by RBI and other regulators
No penalites has been imposed by RBI and other regulators during the financial year ended 31st March, 2018 and 31st March, 2017
21. Draw Down from Reserves
Details of draw down from Reserves is disclosed in Note No. 3 of Notes to Financial Statements.
22. Details of Financing of Parent Company Products
Financing of Parent Company Products during the financial year ended 31st March, 2018 is Nil (Previous year Nil).
23. The Company has not done any Securitisation during the financial year ended 31st March, 2018 and 31st March, 2017.
Mar 31, 2017
1. LEASES
a. In the capacity of Lessee
(i) The Company has certain cancellable operating lease arrangements for office premises and equipments, which range between 11 months to 15 years and are usually renewable by mutual consent, on mutually agreeable terms. Some of these lease agreements have rent escalation upto 5% p.a. or 10% p.a. on renewals. Lease payments charged to the Statement of Profit and Loss with respect to such leasing arrangements aggregate to Rs. 828 Lacs (Previous year Rs. 831 Lacs).
Contingent rent recognized for agreements which stipulate rent payment based on usage is Rs. 11 Lacs (Previous year Rs. 32 Lacs).
(ii) Further, the Company also has certain non-cancellable operating lease arrangements for office premises, which is of 21 years and is usually renewable by mutual consent on mutually agreeable terms. In respect of such arrangements, lease payments for the year aggregating to Rs. 8 Lacs (Previous year Rs. 8 Lacs) have been recognized in the Statement of Profit and Loss.
(iii) Sub lease payments received (or receivable) recognized in the Statement of Profit and Loss for the year is Rs. 2,981 Lacs (Previous year Rs. 2,856 Lacs). Future minimum sublease payments expected to be received under non-cancellable subleases is Rs. 587 Lacs (Previous year Rs. 449 Lacs).
b. In the capacity of Lessor
(i) The Company has given assets on Operating lease (refer Note No. 12) for periods ranging between 5 to 15 years. Some of these lease agreements stipulate rental computation on the basis of earnings of the Lessee. Such contingent rent recognized during the year is Rs. 501 Lacs (Previous year Rs. 237 Lacs).
(ii) The Company also has cancellable operating lease arrangements for office premises, which range between 1 to 3 years and are usually renewable by mutual consent on mutually agreeable terms. Further, the Company has non-cancellable arrangement which is of 3 years and is renewable by mutual consent on mutually agreeable terms. In respect of non-cancellable arrangements, lease earning for the year aggregating to Rs. 1 Lac (Previous year Rs. Nil) have been recognized in the Statement of Profit and Loss.
(g) The estimate of future salary increase, considered in actuarial valuation, takes account of inflation, seniority, promotion and other relevant factors such as supply and demand in the employee market.
2. Information as required by Systemically Important Non-Banking Financial (Non-Deposit Accepting or Holding) Companies Prudential Norms (Reserve Bank) Directions, 2015 and Non-Banking Financial Companies - Corporate Governance (Reserve Bank) Directions, 2015 is furnished vide Annexure - II attached herewith.
3. Figures pertaining to the previous year have been rearranged / regrouped, wherever necessary, to make them comparable with those of current year.
Disclosure of details as required in terms of Systemically Important Non-Banking Financial (Non-Deposit Accepting or Holding) Companies Prudential Norms (Reserve Bank) Directions, 2015 and Non-Banking Financial Companies - Corporate Governance (Reserve Bank) Directions, 2015 14. Disclosures on Risk Exposure in Derivatives (i) Qualitative Disclosure
The structure and organization for management of risk in derivatives trading, is not applicable since the Company is not engaged in derivative trading.
Besides other market risks / core functions, Asset Liability Committee (ALCO) manages the Foreign Currency and Interest Rate Risks also. The company has put in place the policies for hedging / mitigating risks / strategies and processes for continuous monitoring of risks, which will enable the company to quantify risk, both on account of Foreign Currency and Interest Rate Risks. Apart from ALCO there is a Risk Committee of the Board which guides the company in these risks.
The Board has delegated authority to company officials in the Forex Treasury department for entering into Generic derivative products besides Forward Contracts, on behalf of the company, to hedge the Foreign Currency and Interest Rate Risk exposures.
The company has a Market Risk Policy which paves the way for risk reporting and risk monitoring systems. The marked-to-market values are obtained from the banks with whom the hedge deals are done.
The Company, in order to hedge itself against the adverse impact of fluctuations in foreign currency rates / variable interest benchmark on underlying liability, enters into derivative contracts. Derivate contracts which are covered under AS 11, are accounted for as per the aforesaid policy for Foreign Currency Transactions and Translations.
The Company does not enter into derivative contracts for speculation or trading purposes. In accordance with the Guidance Note on Accounting for Derivatives (âGuidance Note'') issued by the Institute of Chartered Accountants of India, the Company has classified derivative contracts (not covered under AS 11) as a hedging instrument and adopted cash flow hegde accounting model. The hedging instrument is measured at fair value, but any gain or loss that is determined to be an effective hedge is recognized in cash flow hedge reserve and recycled to the statement of profit & loss to offset the gains and losses of the hedged items.
The premium or discount arising at the inception of forward exchange contracts is amortized as expense or income over the life of the respective contracts. Exchange differences on such contracts are recognized in the Statement of Profit and Loss in the year in which the exchange rates change. Any profit or loss arising on cancellation or renewal of forward exchange contract is recognized as income or expense in the year in which it is cancelled or renewed.
* The Company is engaged in the business of Infrastructure financing and registered as an Infrastructure Finance Company under the RBI regulations. Our portfolio has been bifurcated in Infrastructure sectors like Transport, Energy, Water Sanitation, Communication, Social & Commercial Infrastructure etc.
Mar 31, 2016
1. Rights, preferences and restrictions in respect of each class of
shares
The Company''s authorised capital consists of two classes of shares,
referred to as Equity Shares and Preference Shares having par value of
Rs. 10/- and Rs. 100/- each respectively. Each holder of equity shares
is entitled to one vote per share. Preference Shareholder has a
preferential right over equity share holders, in respect of repayment
of capital and payment of dividend. However, no such preference shares
have been issued by the Company during the year ended 31st March, 2016
and 31st March, 2015.
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 any of the remaining assets of the
company, after distribution of all preferential amounts. The
distribution will be in proportion to the number of equity shares held
by the shareholders.
2. Shares allotted as fully paid-up without payment being received in
cash/by way of bonus shares (during 5 years preceding 31st March, 2016)
Pursuant to amalgamation of Quippo Infrastructure Equipment Limited
(Transferor Company) into and with the Company, approved by the Equity
Shareholders of the Company and sanctioned by the Hon''ble High Court of
Calcutta on 18th January, 2011, the Company issued and allotted
92,915,839 equity shares of Rs. 10/- par value, as fully paid up bonus
shares, to the pre-amalgamation equity shareholders of the Company on
5th March, 2011.
Further, the Company issued and allotted 294,025,696 equity shares of
Rs. 10/- par value, as fully paid-up, towards consideration for the
aforesaid amalgamation, to the shareholders of the Transferor Company
on 5th March, 2011. This includes 48,600,000 equity shares allotted to
Srei Growth Trust, a Trust settled by the Company on 4th March, 2011,
to receive equity shares of the Company in exchange of the Company''s
shareholding in the Transferor Company. The beneficial interest in the
Trust amounting to Rs. 1,851.50 Lacs, representing the cost of shares
of the Transferor Company, is shown under ''Non-Current Investments''in
the Balance Sheet.
3. Bond / Debenture Redemption Reserve
As per terms of Issue, Company creates Bond / Debenture Redemption
Reserve ("DRR") towards redemption of Long- Term Infrastructure Bonds
and Secured Non-Convertible Debentures issued through Public Issue, as
statutorily required.
The Company had, in the past years, also created DRR towards redemption
of Unsecured Subordinated Bonds / Debentures / Debt (Tier II Capital)
as per management discretion, by virtue of which during FY 2015-16, no
amount was required to be transferred to DRR since, as at March 2016,
the DRR was in excess of the statutory requirements.
4. Long-Term Infrastructure Bonds  Secured, Redeemable,
Non-convertible Debentures
During the financial year 2011-12, the Company had raised fund through
Public issue of Long-Term Infrastructure Bonds in the nature of
Secured, Redeemable Non-Convertible Debentures, eligible for deduction
under section 80 CCF of the Income-Tax Act, 1961. Fund raised has been
utilised for the purposes of infrastructure lending as per terms in the
year of the issue.
5. Nature of certain provisions and their movement
Provision for Bad Debts / Advances is made in the financial statements
according to the Prudential Norms prescribed by RBI for NBFCs. The
Company also makes additional provision based on the management''s best
estimate, to the extent considered necessary.
The Company creates a general provision at 0.30% of the standard assets
outstanding on the balance sheet date, as per the RBI Prudential Norms.
6. Working capital facilities from banks, including working capital
demand loans earmarked against such facilities, are secured by
hypothecation of underlying assets (short-term as well as long-term
loan assets) covered by hypothecation loan and operating lease
agreements with customers and receivables arising therefrom, ranking
pari passu (excluding assets specifically charged to others). As per
the prevalent practice, these facilities are renewed on a year-to-year
basis and therefore, are revolving in nature.
7. Face value of Commercial Paper outstanding as at 31st March, 2016
is Rs. 45,865 Lacs (Previous year Rs. 8,350 Lacs). Face value of
maximum outstanding at any time during the year was Rs. 412,775 Lacs
(Previous year Rs. 287,470 Lacs). Face value of Commercial Paper
repayable within one year is Rs. 45,865 Lacs (Previous year Rs. 8,350
Lacs).
8. To be credited to Investor Education and Protection Fund as and
when due.
9. In order to qualify for registration as an ''Infrastructure Finance
Company'', the Company decided not to accept or renew public deposits
w.e.f. 20th April, 2010. The amount of public deposits outstanding as
on 19th April, 2010 (including matured and unclaimed deposits) along
with accrued and future interest thereof is kept in the form of a Fixed
Deposit, under lien, with Axis Bank Limited, a scheduled commercial
bank, for the purpose of making payment to the depositors. The
outstanding balance of the Fixed Deposit as at 31st March, 2016 is Rs.
25 Lacs (Previous year: Rs. 25 Lacs).
10. LEASES
a. In the capacity of Lessee
(i) The Company has certain cancellable operating lease arrangements
for office premises and equipments, which range between 11 months to
15 years and are usually renewable by mutual consent, on mutually
agreeable terms. Some of these lease agreements have rent escalation
upto 5% p.a. or 10% p.a. on renewals. Lease payments charged to the
Statement of Profit and Loss with respect to such leasing arrangements
aggregate to Rs. 831 Lacs (Previous year Rs. 735 Lacs).
Contingent rent recognised for agreements which stipulate rent payment
based on usage is Rs. 32 Lacs (Previous year Rs. Nil).
(ii) Further, the Company also has certain non-cancellable operating
lease arrangements for office premises, which is of 21 years and is
usually renewable by mutual consent on mutually agreeable terms. In
respect of such arrangements, lease payments for the year aggregating
to Rs. 8 Lacs (Previous year Rs. 9 Lacs) have been recognised in the
Statement of Profit and Loss.
(iii) Sub lease payments received (or receivable) recognised in the
Statement of Profit and Loss for the year is Rs. 2,856 Lacs (Previous
year Rs. 2,675 Lacs). Future minimum sublease payments expected to be
received under non- cancellable subleases is Rs. 449 Lacs (Previous
year Rs. 436 Lacs).
b. In the capacity of Lessor
(i) The Company has given assets on Operating lease (refer Note No. 12)
for periods ranging between 5 to 15 years. Some of these lease
agreements stipulate rental computation on the basis of earnings of the
Lessee. Such contingent rent recognised during the year is Rs. 237 Lacs
(Previous year Rs. 3,014 Lacs).
(ii) Further, the Company also has cancellable operating lease
arrangements for office premises, which range between 1 to 3 years and
are usually renewable by mutual consent on mutually agreeable terms. In
respect of non-cancellable arrangements, lease earning for the year
aggregating to Rs. Nil (Previous year Rs. 25 Lacs) have been recognised
in the Statement of Profit and Loss.
11. During the month of April 2016, the Company has exited its
investment in Viom Networks Limited and the consequential impact will
be refl cted in the financial statements for FY 2016-17.
12. Information as required by Systemically Important Non-Banking
Financial (Non-Deposit Accepting or Holding) Companies Prudential Norms
(Reserve Bank) Directions, 2015 and Non-Banking Financial Companies -
Corporate Governance (Reserve Bank) Directions, 2015 is furnished vide
Annexure  II attached herewith.
13. Figures pertaining to the previous year have been rearranged /
regrouped, wherever necessary, to make them comparable with those of
current year.
Mar 31, 2015
Explanations:
1. The above Cash Flow Statement has been prepared under the Indirect
Method as set out in the Accounting Standard 3 ''Cash Flow
Statements''.
2. Previous year figures have been rearranged / regrouped wherever
necessary to conform to the current year''s classification.
This is the Cash Flow Statement referred to in our report of even date.
1(a) Corporate Information
Srei Infrastructure Finance Limited (the ''Company'') is a public
limited company domiciled in India and incorporated under the
provisions of the Companies Act, 1956. The Company is also a Public
Financial Institution (PFI) notified under section 4A of the Companies
Act, 1956. The Company received a Certificate of Registration from the
Reserve Bank of India (''RBI'') on 1st August, 1998 to commence / carry
on the business of Non-Banking Financial Institution (''NBFI'') and was
subsequently classified as Infrastructure Finance Company vide
Certificate of Registration dated 11th May, 2010.
2.1 Reconciliation of the Number of Equity Shares outstanding
The reconciliation of the number of equity shares outstanding and the
corresponding amount thereof, as at the Balance Sheet date is set out
below:
2.2 Rights, preferences and restrictions in respect of each class of
shares
The Company''s authorised capital consists of two classes of shares,
referred to as Equity Shares and Preference Shares having par value of
Rs. 10/- and Rs. 100/- each respectively. Each holder of equity shares
is entitled to one vote per share. Preference Shareholder has a
preferential right over equity share holders, in respect of repayment
of capital and payment of dividend. However, no such preference shares
have been issued by the Company during the year ended 31st March, 2015
and 31st March, 2014.
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 any of the remaining assets of the
Company, after distribution of all preferential amounts. The
distribution will be in proportion to the number of equity shares held
by the shareholders.
2.3 Shares allotted as fully paid-up without payment being received in
cash / by way of bonus shares (during 5 years preceding 31st March,
2015)
Pursuant to amalgamation of Quippo Infrastructure Equipment Limited
(Transferor Company) into and with the Company, approved by the Equity
Shareholders of the Company and sanctioned by the Hon''ble High Court of
Calcutta on 18th January, 2011, the Company issued and allotted
92915839 equity shares of Rs. 10/- par value, as fully paid-up bonus
shares, to the pre-amalgamation equity shareholders of the Company on
5th March, 2011.
Further, the Company issued and allotted 294025696 equity shares of Rs.
10/- par value, as fully paid-up, towards consideration for the
aforesaid amalgamation, to the shareholders of the Transferor Company
on 5th March, 2011. This includes 48600000 equity shares allotted to
Srei Growth Trust, a Trust settled by the Company on 4th March, 2011,
to receive equity shares of the Company in exchange of the Company''s
shareholding in the Transferor Company. The beneficial interest in the
Trust amounting to Rs. 1,851.50 Lacs, representing the cost of shares
of the Transferor Company, is shown under ''Non-Current Investments'' in
the Balance Sheet.
3.1 Bond / Debt Redemption Reserve
As per terms of Issue, Company creates Bond / Debt Redemption Reserve
towards redemption of Long-Term Infrastructure Bonds and Secured
Non-Convertible Debenture issued through Public Issue. Company had also
created Bond / Debt Redemption Reserve towards redemption of Unsecured
Subordinated Bonds / Debentures / Debt (Tier II Capital) as per
management discretion. Details of movement is as below:
4.1 Long-Term Infrastructure Bonds - Secured, Redeemable,
Non-Convertible Debentures
During the financial year 2011-12, the Company had raised fund through
Public Issue of Long-Term Infrastructure Bonds in the nature of
Secured, Redeemable Non-Convertible Debentures, eligible for deduction
under section 80 CCF of the Income Tax Act, 1961. Fund raised has been
utilised for the purposes of infrastructure lending as per terms in the
year of the issue.
Maturity profile and rate of interest of these Bonds are as set out
below:
(Rs. in Lacs)
Bonds with interest rate of 8.90% have an overall tenure of 10 years
and those with 9.15%, 15 years. Buyback option is available for all
bonds at the end of 5 years i.e. on 22.03.2017. Bonds are secured by
exclusive charge on specific receivables of the Company & pari-passu
mortgage / charge on immovable property.
4.2 Non-Convertible Debentures
* Includes current maturities
1 Secured against Receivables / Assets of the Company and mortgage of
immovable property.
2 Secured against Mortgage of immovable property.
3 Secured against Receivables / Assets of the Company and mortgage of
immovable property. NCD''s have an overall tenure of 7 years and having
put / call option at the end of 5 years i.e. on 05-11-2017.
4 Secured against Receivables / Assets of the Company and mortgage of
immovable property. Due to cumulative Interest bonds wherein interest
is payable on maturity, yield has been considered as rate of interest.
5 Secured against Receivables / Assets of the Company and mortgage of
immovable property. Due to cumulative Interest bonds wherein interest
is payable on maturity, yield has been considered as rate of interest.
NCD''s have an overall tenure of 7 years and having put / call option at
the end of 5 years i.e. on 05-11-2017.
6 Secured against Mortgage of immovable property. NCD''s have an overall
tenure of 5 years and having put / call option at the end of 3 years
i.e. on 08-06-2015.
7 Secured against Receivables / Assets of the Company and mortgage of
immovable property. As interest rate during the tenor of bond is
different i.e. Year 1: 12.50%, Year 2: 12%, Year 3: 11.50%, Year 4:
11.25%, Year 5: 11.25%, interest rate for 1st year considered for
disclosure.
8 Secured against Receivables / Assets of the Company.
9 Secured against Receivables / Assets of the Company and mortgage of
immovable property. In case investor fall under individual category and
who are holder of NCD(s) / Bond(s) previously issued by the Company in
past public issues and / or are equity shareholder(s) of Company on the
date of allotment, shall be eligible for additional coupon rate of
0.25% p.a. provided the NCD(s) / Bond(s) are held by investors on the
relevant record date of interest payment.
10 Secured against Receivables / Assets of the Company and mortgage of
immovable property. In case investor fall under individual category and
who are holder of NCD(s) / Bond(s) previously issued by the Company in
past public issues and / or are equity shareholder(s) of Company and /
or senior citizens on the date of allotment, shall be eligible for
additional coupon rate of 0.25% p.a. provided the NCD(s) / Bond(s) are
held by the investors on the relevant record date of interest payment.
Funds raised Rs. 47,614 Lacs through public issue of Secured,
Redeemable Non-Convertible Debentures have been utilised for the
purposes as per the terms of the issue.
All the above debentures are redeemable at par.
1 Secured against Receivables / Assets of the Company and mortgage of
immovable property.
2 Secured against Mortgage of immovable property.
3 Secured against Receivables / Assets of the Company and mortgage of
immovable property. NCD''s have an overall tenure of 7 years and having
put / call option at the end of 5 years i.e. on 05-11-2017.
4 Secured against Receivables / Assets of the Company and mortgage of
immovable property. Due to cumulative Interest bonds wherein interest
is payable on maturity, yield has been considered as rate of interest.
5 Secured against Receivables / Assets of the Company and mortgage of
immovable property. Due to cumulative Interest bonds wherein interest
is payable on maturity, yield has been considered as rate of interest.
NCD''s have an overall tenure of 7 years and having put / call option at
the end of 5 years i.e. on 05-11-2017.
6 Secured against Mortgage of immovable property. NCD''s have an overall
tenure of 5 years and having put / call option at the end of 3 years
i.e. on 08-06-2015.
7 Secured against Receivables / Assets of the Company and mortgage of
immovable property. As interest rate during the tenor of bond is
different i.e. Year 1: 12.50%, Year 2: 12%, Year 3: 11.50%, Year 4:
11.25%, Year 5: 11.25%, interest rate for 1st year considered for
disclosure.
8 Secured against Receivables / Assets of the Company and mortgage of
immovable property. In case investor fall under individual category and
who are holder of NCD(s) / Bond(s) previously issued by the Company in
past public issues and / or are equity shareholder(s) of Company on the
date of allotment, shall be eligible for additional coupon rate of
0.25% p.a. provided the NCD(s) / Bond(s) are held by investors on the
relevant record date of interest payment.
Funds raised Rs. 33,635 Lacs through public issue of Secured,
Redeemable Non-Convertible Debentures have been
utilised for the purposes as per the terms of the issue.
All the above debentures are redeemable at par.
* Includes current maturities
The above Term Loans are secured by charge on specific assets covered
by loan / lease agreements with customers and / or receivables arising
therefrom.
1 Includes loans of Rs. 9,817 Lacs (Previous year: Rs. 12,299 Lacs)
guaranteed by Export Import Bank of the United States.
4.4 Unsecured Subordinated bonds / debentures (Tier II Capital)
During the year, the Company raised subordinated debt qualifying for
Tier II capital amounting to Rs. Nil (Previous year: Rs. 11,530 Lacs).
The following table sets forth the details of the outstanding:
5. DEFERRED TAX LIABILITIES (Net)
In terms of Accounting Standard 22, the net Deferred Tax Liability
(DTL) recognised during the year is Rs. 1,041 Lacs (Previous year: Rs.
660 Lacs). Consequently, the net DTL as at year-end stands at Rs.
11,182 Lacs (Previous Year Rs. 10,144 Lacs). The break-up of major
components of net DTL is as follows:
7.1 Nature of certain provisions and their movement
Provision for Bad Debts / Advances is made in the financial statements
according to the Prudential Norms prescribed by RBI for NBFCs. The
Company also makes additional provision based on the management''s best
estimate, to the extent considered necessary.
The Company creates a general provision at 0.25% of the standard assets
outstanding on the balance sheet date, as per the RBI Prudential Norms.
The following table sets forth the movement of aforesaid Provisions:
8.1 Working capital facilities from banks, including working capital
demand loans earmarked against such facilities, are secured by
hypothecation of underlying assets (short-term as well as long-term
loan assets) covered by hypothecation loan and operating lease
agreements with customers and receivables arising therefrom, ranking
pari passu (excluding assets specifically charged to others). As per
the prevalent practice, these facilities are renewed on a year-to-year
basis and therefore, are revolving in nature.
8.2 Face value of Commercial Paper outstanding as at 31st March, 2015
is Rs. 8,350 Lacs (Previous year Rs. Nil Lacs). Face value of maximum
outstanding at any time during the year was Rs. 287,470 Lacs (Previous
year Rs. 60,000 Lacs). Face value of Commercial Paper repayable within
one year is Rs. 8,350 Lacs (Previous year Rs. Nil Lacs)
9.1 The Company has not received any memorandum from ''Suppliers'' (as
required to be filed by the ''Suppliers'' with the notified authority
under the Micro, Small and Medium Enterprises Development Act, 2006)
claiming their status as on 31st March, 2015 as micro, small or medium
enterprises. Consequently, the interest paid / payable by the company
to such Suppliers, during the year is Rs. Nil (Previous year: Rs. Nil).
10.1 To be credited to Investor Education and Protection Fund as and
when due.
10.2 In order to qualify for registration as an ''Infrastructure Finance
Company'', the Company decided not to accept or renew public deposits
w.e.f. 20th April, 2010. The amount of public deposits outstanding as
on 19th April, 2010 (including matured and unclaimed deposits) along
with accrued and future interest thereof is kept in the form of a Fixed
Deposit, under lien, with Axis Bank Limited, a scheduled commercial
bank, for the purpose of making payment to the depositors. The
outstanding balance of the Fixed Deposit as at 31st March, 2015 is Rs.
25 Lacs (Previous year: Rs. 25 Lacs).
** There is no system of issuance of distinctive shares in the country
of registration.
All the Investments mentioned above are fully paid-up
# Attivo Economic Zone (Mumbai) Private Limited (Formerly Mumbai
Futuristic Economic Zone Private Limited) became an associate w.e.f.
30.12.2014
## The Company has an investment of Rs. 1,051 Lacs (Previous year Rs.
1,051 Lacs) in the shares of Sahaj e-village Limited ("Sahaj"), an
Associate of the Company in terms of Accounting Standard 23,
"Accounting for Investments in Associates in Consolidated Financial
Statements". Further, the Company has advanced loans amounting to Rs.
20,937 Lacs (Previous year Rs. 25,942 Lacs) to Sahaj.
Sahaj is a long-gestation rural e-governance initiative and due to the
accumulated losses, it''s net worth has eroded as at 31st March, 2015.
However, Sahaj has informed the Company that it is in the process of
implementing a revamped business plan, based upon detailed study on the
present and future business model, operations and financial plan, as
suggested by a renowned consultant and that it shall continue to be a
going concern in the foreseeable future.
Considering the long-term strategic nature of investment and also in
view of the revamped business plan of Sahaj as enumerated above, no
provision is considered necessary by the Company at present, for any
diminution in the value of investments and against loans advanced to
Sahaj.
1 Secured by underlying assets and in certain cases are additionally
secured by immovable properties and / or pledge of equity shares of the
borrowers by way of collateral security. Exposures which are secured by
a charge over future toll revenue / cash flows / receivables etc. have
been considered as secured.
2 Loans to Others includes assets aggregating Rs. 22,028 Lacs (Previous
year Rs. 33,325 Lacs) acquired in satisfaction of debt and held for
sale.
3 Includes Non-Performing Assets of Rs. 77,813 Lacs (Previous year Rs.
38,683 Lacs).
Notes:
i) There are no restructured accounts under "CDR Mechanism" and
under "SME Debt Restructuring Mechanism" categories.
ii) Other than the aforesaid, the Company has created further provision
of Rs. Nil (Previous year Rs. 38 Lacs) towards diminution in fair value
of re-structured advances.
27. CONTINGENT LIABILITIES AND COMMITMENTS (TO THE EXTENT
NOT PROVIDED FOR)
(Rs. in Lacs)
As at As at
Particulars 31st March 31st March,
2015 2014
A. Contingent Liabilities
(a) Claims against the Company not
acknowledged as debts:
Disputed Income Tax1 5,928 3,990
Fringe Benefit Tax2 226 226
Disputed Service Tax3 302 302
Central Sales Tax4 406 211
Entry Tax5 2 2
(b) Guarantees:
Bank Guarantees6 3,124 1,858
Guarantees to Banks and Others against
credit facilities extended by them to
third parties 18,522 12,706
Guarantees to Banks and others, in the
form of Put Option against loan
facilities 39,189 40,704
Total 67,699 59,999
1 Certain Assessment Orders disallowing Special Reserve (created as per
Section 45-IC of the RBI Act, 1934), Debt Redemption Reserve,
Non-taxability of amount received on assignment of rights, Provision
for Standard Assets, Disallowances under section 14A, Disallowance of
Provision for NPA, etc. for the purpose of determining tax liability as
per the provisions of Section 115JB of the Income Tax Act, 1961 have
been challenged by the company before the appropriate authorities.
Similarly, disallowances under section 14A, Disallowance of Provision
for NPA, Disallowance of Provision for earned leave encashment, matter
relating to deduction u/s 36(1)(viii), Education Cess, Upfront Fees on
borrowings, Long-Term Capital Gain arising out of transaction under a
Scheme of Arrangement sanctioned by the Hon''ble Calcutta High Court on
28th January, 2008, etc. under normal provisions of the Income Tax Act,
1961 have also been challenged by the company before the appropriate
authorities.
Pending disposal of the cases filed, the Company has not provided for
the Income Tax liabilities arising out of the same.
2 The Company has challenged the constitutional validity of Fringe
Benefit Tax (FBT) before the Hon''ble High Court at Calcutta and the
Hon''ble Court has granted interim stay on levy of such FBT on the
Company. In view of this, the Company has not provided for any
liability against FBT since its inception upto the date of its
abolition i.e. 31st March, 2009.
3 Service Tax department had issued a Show Cause Notice (SCN) cum
Demand Notice for Rs. 450 Lacs, on 20th April, 2012
with regards to availment of Cenvat Credit, considering the
observations of auditors appointed u/s 14AA of the Central Excise
Act, 1944. The Company had filed it''s reply followed by personal
hearings. An Order dated 31st March, 2014 was passed by the
Commissioner of Service Tax, Kolkata confirming a demand of Rs. 151
Lacs along with penalty of Rs. 151 Lacs. The
Company has filed an Appeal and Stay Application before the Customs,
Excise and Service Tax Appelate Tribunal (CESTAT), Kolkata.
4 A demand of Rs. 211 lacs has been raised for the period 2010-11 by
the Assessing Officer following disallowance of exemption claimed u/s
5(2) of the Central Sales Tax Act, 1956 vide assessment order dated
28.06.2013. An appeal against the said assessment order filed on
07.10.2013 before Senior Joint Commissioner of Commercial Taxes, West
Bengal has been rejected. An appeal against rejection has been filed by
the Company before West Bengal Sales Tax Appellate and Revisional Board
and hearing is awaited.
A demand of Rs. 195 lacs has been raised for the period 2011-12 by the
Assessing Officer following disallowance of exemption claimed u/s Sec
5(2) of the Central Sales Tax Act, 1956 vide assessment order dated
30.06.2014. An appeal against the assessment order has been filed
before the Appellate Authority on 07.11.2014.
5 Entry Tax in West Bengal was held unconstitutional by the Hon''ble
Calcutta High Court in June, 2013 and the Govt. of West Bengal has
appealed before a Division Bench of the Hon''ble High Court. Till
further order, the deposit of tax has been kept in abeyance.
6 Includes Rs. 697 Lacs (Previous year Rs. 697 Lacs) issued on
Company''s behalf by the Banker of Joint Venture Company.
28. The Company has entered into Options / Swaps / Forward contracts
(being derivative instruments) which are not intended for trading or
speculation, for the purpose of hedging currency and interest rate
related risks. Options, Swaps and Forward contracts outstanding as at
year end are as follows:
33. LEASES
a. In the capacity of Lessee
(i) The Company has certain cancellable operating lease arrangements
for office premises and equipments, which range between 11 months to 15
years and are usually renewable by mutual consent, on mutually
agreeable terms. Lease payments charged to the Statement of Profit and
Loss with respect to such leasing arrangements aggregate to Rs. 735
Lacs (Previous year Rs. 706 Lacs).
Some of the above cancellable lease agreements have rent escalation
upto 5% p.a. or 10% p.a. on renewals. None of the operating lease
agreements entered into by the Company provide for any contingent rent
payment and hence, the Company has not paid any contingent rent in the
current and previous year.
(ii) Further, the Company also has certain non-cancellable operating
lease arrangements for office premises, which is of 21 years and is
usually renewable by mutual consent on mutually agreeable terms. In
respect of such arrangements, lease payments for the year aggregating
to Rs. 9 Lacs (Previous year Rs. 10 Lacs) have been recognised in the
Statement of Profit and Loss.
(iii) Sub lease payments received (or receivable) recognised in the
Statement of Profit and Loss for the year is Rs. 2,675 Lacs (Previous
year Rs. 2,349 Lacs). Future minimum sublease payments expected to be
received under non- cancellable subleases is Rs. 436 Lacs (Previous
year Rs. 400 Lacs).
b. In the capacity of Lessor
(i) The Company has given assets on Operating lease (refer Note No. 12)
for periods ranging between 5 to 15 years. Some of these lease
agreements stipulate rental computation on the basis of earnings of the
Lessee. Such contingent rent recognised during the year is Rs. 3,014
Lacs (Previous year Rs. 3,679 Lacs).
(ii) Further, the Company also has certain non-cancellable operating
lease arrangements for office premises, which range between 1 to 3
years and are usually renewable by mutual consent on mutually agreeable
terms. In respect of such arrangements, lease earning for the year
aggregating to Rs. 25 Lacs (Previous year Rs. 189 Lacs) have been
recognised in the Statement of Profit and Loss.
34. DISCLOSURE PURSUANT TO ACCOUNTING STANDARD 15 - EMPLOYEE BENEFITS
The trustees of the gratuity scheme for the employees of the Company
have entrusted the administration of the scheme to the Life Insurance
Corporation of India (LIC).
(g) The estimate of future salary increase, considered in actuarial
valuation, takes account of inflation, seniority, promotion and other
relevant factors such as supply and demand in the employee market.
(h) The amount provided for defined contribution plan is as follows:
35. DISCLOSURE PURSUANT TO ACCOUNTING STANDARD 18 - RELATED PARTY
DISCLOSURES Related Parties:
Holding Company Country of origin
Adisri Commercial Private Limited
(w.e.f. 26.02.2015) India
Srei Capital Markets Limited India
Sunsidiaries & Setop -down Subsidiries Country of origin
Srei Alternative Investment Managers Limited India
Srei Infrastructure Advisors Limited India
Attivo Economic Zones Private Limited
(Formerly Global Investment Trust India
Limited) (ceased to be Subsidiary
w.e.f. 21.11.2014)
Attivo Economic Zone (Mumbai) Private
Limited (Formerly Mumbai Futuristic India
Economic Zone Private Limited)
(ceased to be Subsidiary w.e.f.
30.12.2014) Controlla Electrotech Private Limited India
Srei Mutual Fund Asset Management Private Limited India
Srei Mutual Fund Trust Private Limited India
Srei International Infrastructure Services GmbH, Germany Germany
Srei Forex Limited India
Srei Insurance Broking Private Limited India
Bengal Srei Infrastructure Development Limited
(Subsidiary of Srei India
Infrastructure Advisors Limited)
Hyderabad Information Technology Venture
Enterprises Limited (Subsidiary of India
Srei Alternative Investment Managers Limited)
Cyberabad Trustee Company Private Limited
(Subsidiary of Srei Alternative India
Investment Managers Limited)
ZAO Srei Leasing,Russia Subsidiary of Srei
International Infrastructure Russia
Services GmbH, Germany)
Srei Advisors Pte Limited, Singapore
(Subsidiary of Srei International Singapore
Infrastructure Services GmbH, Germany) y H
Goldensons Construction Private Limited India
Quippo Oil & Gas Infrastructure Limited India
Performance Drilling International Private Limited
(Subsidiary of Quippo Oil & I
Gas Infrastructure Limited w.e.f. 23.01.2015) Nigeria
Quippo Energy Private Limited India
Quippo Mauritius Private Limited (ceased to be
Subsidiary of Quippo Energy Mauritius
Private Limited w.e.f. 25.02.2015)
Quippo Energy Nigeria Private Limited
(Subsidiary of Quippo Private
Limited, ceased to be Step-down subsidiary of
Quippo Energy Private Limited Mauritius
w.e.f. 25.02.2015)
Quippo CJ Exploration & Production Private Nigeria
Limited (ceased to be Subsidiary
of Quippo Oil & Gas Infrastructure
Limited w.e.f. 08.07.2014)
Srei Asset Reconstruction Private Limited
(Subsidiary between 30.06.2014 to , India
01.09.2014 and w.e.f. 31.03.2015)
Srei Equipment Finance Limited India
Country of origin Sahaj e-Village Limited India
Attivo Economic Zone (Mumbai) Private Limited
(Formerly Mumbai Futuristic Economic Zone Private
Limited) (ceased to be Subsidiary and has become India
Associate w.e.f. 30.12.2014)
Quippo Construction Equipment Limited
(ceased to be Associate w.e.f. India
29.09.2014)
Srei Mutual Fund Trust India
Srei Growth Trust India
Name Designation
Mr. Hemant Kanoria Chairman & Managing Director
Mr. John Moses Harding
(w.e.f. 01.04.2014) Group Chief Executive Officer-Liability
& Treasury Management
Mr. Bijoy Kumar Daga
(w.e.f. 01.04.2014) Chief Executive Officer-Infrastructure
Project Finance
Mr. Bajrang Kumar
Choudhary
(w.e.f. 01.04.2014) Chief Executive Officer - Infrastructure
Project Development
Mr. Sanjeev Sancheti
(from 01.04.2014 to
09.11.2014) Group Head - Corporate Strategy and
Planning
Mr. Rajdeep Khullar
(from 01.04.2014 to
09.11.2014) Group Head - Legal
Mr. Deepak Chatrath
(from 22.05.2014 to
09.11.2014) Sr. Vice-President - Internal Audit
Mr. Shashi Bhushan Tiwari
(from 01.04.2014 to
09.11.2014) Chief Operating Officer
Mr. Rajesh Jain
(from 01.04.2014 to
09.11.2014) Head - Human Resources
Mr. Kishore Kumar Lodha Chief Financial Officer
Mr. Sandeep Lakhotia
(w.e.f. 01.04.2014) Company Secretary
Viom Networks Limited
* Refer Note No. 35
@ The outstanding are interest bearing except that of Controlla
Electrotech Private Limited. Loan repayment beyond seven years is Rs.
33,749 Lacs.
# The outstanding are interest bearing except that of Controlla
Electrotech Private Limited, Srei Alternative Investment Managers
Limited and Srei Insurance Broking Private Limited. Loan repayment
beyond seven years is Rs. 47,996 Lacs.
37. Disclosure in respect of Company''s Joint Venture in India pursuant
to Accounting Standard 27 ''Financial Reporting of Interest in Joint
Ventures'':
38. During the year the Company has purchased from an associate
receivables amounting to Rs. 12,333 Lacs at Rs. 11,800 Lacs along with
all rights attached to it from the date of such purchase. The
receivables are due from State Government undertakings and are
recoverable along with interest on delayed payment. These have been
grouped under Other Receivables.
39. Information as required by Systemically Important Non-Banking
Financial (Non-Deposit Accepting or Holding) Companies Prudential Norms
(Reserve Bank) Directions, 2015 and Non-Banking Financial Companies -
Corporate Governance (Reserve Bank) Directions, 2015 is furnished vide
Annexure - II attached herewith.
40. Figures pertaining to the previous year have been rearranged /
regrouped, wherever necessary, to make them comparable with those of
current year.
Notes:
1 Advances represent the maturity pattern of loan assets and rentals on
operating lease assets.
2 The maturity pattern of Investments has been considered on the basis
of Managements best estimates.
3 The maturity pattern of working capital facilities sanctioned by the
banks has been apportioned in ratio of the maturity pattern of
Advances.
14. Disclosures on Risk Exposure in Derivatives
(i) Qualitative Disclosure
The structure and organization for management of risk in derivatives
trading, is not applicable since the Company is not engaged in
derivative trading.
Besides other market risks / core functions, Asset Liability Committee
(ALCO) manages the Foreign Currency and Interest Rate Risks also. The
Company has put in place the policies for hedging / mitigating risks /
strategies and processes for continuous monitoring of risks, which will
enable the Company to quantify risk, both on account of Foreign
Currency and Interest Rate Risks. Apart from ALCO there is a Risk
Committee of the Board which guides the Company in these risks.
The Board has delegated authority to company officials in the Forex
Treasury department for entering into Generic derivative products
besides Forward Contracts, on behalf of the Company, to hedge the
Foreign Currency and Interest Rate Risk exposures.
The Company has a Market Risk Policy which paves the way for risk
reporting and risk monitoring systems. The marked-to-market values are
obtained from the banks with whom the hedge deals are done.
The Company, in order to hedge itself against the adverse impact of
fluctuations in foreign currency rates / variable interest benchmark on
underlying liability, enters into the derivative contracts in the
nature of forward exchange contracts. The Company does not enter into
derivative contracts for speculation or trading purposes. Derivate
contracts which are closely linked to the existing assets and
liabilities are accounted for as per the policy stated for foreign
currency transactions and translation.
In accordance with the ICAI announcement, derivative contracts, other
than foreign currency forward contracts covered under AS 11, are
"marked-to-market" on a portfolio basis, and the net loss, if any,
after considering the offsetting effect of gain on the underlying
hedged item, is charged to the Statement of Profit and Loss. Net gain,
if any, after considering the offsetting effect of loss on the
underlying hedged item, is ignored. The Company believes that the above
treatment reflects the true effect of the hedge and also reflects the
economic substance of the impact of derivative contracts.
The premium or discount arising at the inception of forward exchange
contracts is amortised as expense or income over the life of the
respective contracts. Exchange differences on such contracts are
recognised in the Statement of Profit and Loss in the year in which the
exchange rates change. Any profit or loss arising on cancellation or
renewal of forward exchange contract is recognised as income or expense
in the year in which it is cancelled or renewed.
Mar 31, 2014
1. CONTINGENT LIABILITIES AND COMMITMENTS (TO THE EXTENT NOT PROVIDED
FOR)
(Rs. in Lacs)
Particulars As at 31st As at 31st
March 2014 March 2013
A. Contingent Liabilities
(a) Claims against the Company not
acknowledged as debts:
Disputed Income Tax1 3,990 3,779
Fringe Benefit Tax2 226 226
Disputed Service Tax3 302 450
Central Sales Tax4 211 -
Entry Tax5 2 -
(b) Guarantees:
Bank Guarantees6 1,858 1,637
Corporate Guarantees to Banks and
Others 12,706 8,286
Guarantees to Banks and Others, in the
form of Put Option against loan
facilities 40,704 8,750
Total 59,999 23,128
B. Commitments
Estimated amount of capital contracts
remaining to be executed and not
provided for (Net of advances) 508 1,157
On account of Letter of Credit 68,608 45,177
On account of Derivative Instruments
(refer note 28)
1 Certain Assessment Orders disallowing Special Reserve (created as per
Section 45-IC of the RBI Act, 1934), Debt Redemption Reserve,
Disallowances under section 14A and Disallowance of Provision for NPA
for the purpose of determining tax liability as per the provisions of
Section 115JB, Disallowances under section 14A, Disallowance of
Provision for NPA, Disallowance of Provision for earned leave
encashment, matter relating to deduction U/s 36(1)(viii), Upfront Fees
on borrowings and Long- Term Capital Gain arising out of transaction
under a Scheme of Arrangement sanctioned by the Hon''ble Calcutta High
Court on 28th January, 2008 under normal provisions of the Income Tax
Act, 1961 have been challenged by the Company before the appropriate
authorities. Pending disposal of the cases filed, the Company has not
provided for the Income Tax liabilities arising out of the same.
2 The Company has challenged the constitutional validity of Fringe
Benefit Tax (FBT) before the Hon''ble High Court at Calcutta and the
Hon''ble Court has granted interim stay on levy of such FBT on the
Company. In view of this, the Company has not provided for any
liability against FBT since its inception upto the date of its
abolition i.e. 31st March, 2009.
3 Service Tax department had issued a Show Cause Notice (SCN) cum
Demand Notice for Rs. 450 lacs, on 20th April, 2012 with regards to
availment of Cenvat Credit, considering the observations of auditors
appointed U/s 14AA of the Central Excise Act, 1944. The Company had
filed it''s reply followed by personal hearings. An Order dated 31st
March, 2014 was passed by the Commissioner of Service Tax, Kolkata
confirming a demand of Rs. 151 lacs along with penalty of Rs. 151 lacs.
The Company is in the process of filing an appeal before the Appellate
Authority against the said Order.
4 A demand of Rs. 211 lacs has been raised for the period 2010-11 by
the Assessing Officer following disallowance of exemption claimed U/s
5(2) of the CST Act, 1956 vide assessment order dated 28.06.2013. An
appeal against the said assessment order has been filed before the
Appellate Authority on 07.10.2013.
5 Entry Tax in West Bengal was held unconstitutional by the Hon''ble
Calcutta High Court in June, 2013 and the Govt. of West Bengal has
appealed before a Division Bench of the Hon''ble High Court. Till
further order, the deposit of tax has been kept in abeyance.
6 Includes Rs. 697 Lacs (Previous year Rs. 697 Lacs) issued on
Company''s behalf by the Banker of Joint Venture Company.
2. LEASES
a. In the capacity of Lessee
(i) The Company has certain cancellable operating lease arrangements
for office premises and equipments, which range between 11 months to 15
years and are usually renewable by mutual consent, on mutually
agreeable terms. Lease payments charged to the Statement of Profit and
Loss with respect to such leasing arrangements aggregate to Rs. 706
Lacs (Previous year Rs. 1,259 Lacs).
Some of the above cancellable lease agreements have rent escalation
upto 5% p.a. or 10% p.a. on renewals. None of the operating lease
agreements entered into by the Company provide for any contingent rent
payment and hence, the Company has not paid any contingent rent in the
current and previous year.
(ii) Further, the Company also has certain non-cancellable operating
lease arrangements for office premises, which range between 5 to 21
years and are usually renewable by mutual consent on mutually agreeable
terms. In respect of such arrangements, lease payments for the year
aggregating to Rs. 10 Lacs (Previous year Rs. 10 Lacs) have been
recognised in the Statement of Profit and Loss.
(iii) Sub lease payments received (or receivable) recognised in the
Statement of Profit and Loss for the year is Rs. 2,349 Lacs (Previous
year Rs. 2,114 Lacs). Future minimum sublease payments expected to be
received under non-cancellable subleases is Rs. 400 Lacs (Previous year
Rs. 549 Lacs).
b. In the capacity of Lessor
(i) The Company has given assets on Operating lease (refer note 12) for
periods ranging between 5 to 15 years. Some of these lease agreements
stipulate rental computation on the basis of earnings of the Lessee.
Such contingent rent recognised during the year is Rs. 3,679 Lacs
(Previous year Rs. 1,895 Lacs).
(ii) Further, the Company also has certain non-cancellable operating
lease arrangements for office premises, which range between 1 to 3
years and are usually renewable by mutual consent on mutually agreeable
terms. In respect of such arrangements, lease earning for the year
aggregating to Rs. 189 Lacs (Previous year Rs. 73 Lacs) have been
recognised in the Statement of Profit and Loss.
3. DISCLOSURE PURSUANT TO ACCOUNTING STANDARD (AS) 15 (REVISED) -
EMPLOYEE BENEFITS
The trustees of the gratuity scheme for the employees of the Company
have entrusted the administration of the scheme to the Life Insurance
Corporation of India (LIC).
(g) The estimate of future salary increase, considered in actuarial
valuation, takes account of inflation, seniority, promotion and other
relevant factors such as supply and demand in the employee market.
4. Information as required by Non-Banking Financial (Non-Deposit
Accepting or Holding) Companies Prudential Norms (Reserve Bank)
Directions, 2007 is furnished vide Annexure - II and III attached
herewith.
5. Figures pertaining to the previous year have been rearranged /
regrouped, reclassified and restated, wherever necessary, to make them
comparable with those of current year.
Mar 31, 2013
1. Contingent Liabilities And Commitments (to the extent not provided
for)
(Rs.in Lakh)
Particulars As at 31st
March, 2013 As at 31st
March, 2012
Contingent Liabilities
Bank Guarantees1 1,637 1,707
Corporate Guarantee to Banks 8,286 4,915
Guarantee in the form of Put
Option to Banks against loan
facilities 8,750 8,900
Disputed Income Tax 2 3,779 3,654
Fringe Benefit Tax 226 226
Disputed Service Tax 4450
Total 23,128 19,402
Commitments
Estimated amount of capital contracts remaining to be executed and not
provided for (Net of advances) 1,157 2,782 Commitment on account of
Derivative Instruments (refer note 28)
1 Includes Rs. 697 Lakh (Previous year Rs. 892 Lakh) issued on Company''s
behalf by a Joint Venture Company.
2 Certain Assessment Orders disallowing Special Reserve (created as per
Section 45-IC of the RBI Act, 1934), Debt Redemption Reserve,
Disallowances under section 14A and Disallowance of Provision for NPA
for the purpose of determining tax liability as per the provisions of
Section 115JB, Disallowances under section 14A, Disallowance of
Provision for NPA, Disallowance of Provision for earned leave
encashment, matter relating to deduction U/s 36(1)(viii), Upfront Fees
on borrowings and Long-Term Capital Gain arising out of transaction
under a Scheme of Arrangement sanctioned by the Hon''ble Calcutta High
Court on 28.01.08 under normal provisions of the Income Tax Act, 1961
have been challenged by the Company before the appropriate authorities.
Pending disposal of the cases filed, the Company has not provided for
the Income Tax liabilities arising out of the same.
3 The Company has challenged the constitutional validity of Fringe
Benefit Tax (FBT) before the Hon''ble High Court at Calcutta and the
Hon''ble Court has granted interim stay on levy of such FBT on the
Company. In view of this, the Company has not provided for any
liability against FBT since its inception upto the date of its
abolition i.e., 31st March, 2009.
4 Service Tax Department has issued a Show Cause Notice (SCN) cum
Demand Notice for Rs. 450 Lakh, on 20th April, 2012 with regards to
availment of Cenvat Credit, considering the observations of auditors
appointed u/s 14AA of the Central Excise Act. The Company has filed
it''s reply followed by personal hearing on 11th April, 2013.
2. Leases
a. In the capacity of Lessee
(i) The Company has certain cancellable operating lease arrangements
for office premises and equipments, which range between 11 months to 15
years and are usually renewable by mutual consent, on mutually
agreeable terms. Lease payments charged to the Statement of Profit and
Loss with respect to such leasing arrangements aggregate to Rs. 1,259
Lakh (Previous year Rs. 592 Lakh).
Some of the above cancellable lease agreements have rent escalation
upto 5% p.a. or 10% p.a. on renewals. None of the operating lease
agreements entered into by the Company provide for any contingent rent
payment and hence, the Company has not paid any contingent rent in the
current and previous year.
3. Disclosure pursuant to Accounting Standard (AS) 15 (Revised) -
Employee Benefits
The trustees of the gratuity scheme for the employees of the Company
have entrusted the administration of the scheme to the Life Insurance
Corporation of India (LIC).
(a) The estimate of future salary increase, considered in actuarial
valuation, takes account of inflation, seniority, promotion and other
relevant factors such as supply and demand in the employee market.
4. Loans & Advances include Loan of Rs. Nil (Previous year Rs. 3,175 Lakh)
due from a private company having at least one common director with the
Company.
5. Information as required by Non-Banking Financial (Non-Deposit
Accepting or Holding) Companies Prudential Norms (Reserve Bank)
Directions, 2007 is furnished vide Annexure - II and III attached
herewith.
6. Figures pertaining to the previous year have been rearranged /
regrouped, reclassified and restated, wherever necessary, to make them
comparable with those of current year.
Mar 31, 2012
1.1 Reconciliation of Equity Shares outstanding
The reconciliation of the number of equity shares outstanding and the
corresponding amount thereof, as at the Balance Sheet
1.2 Rights, preferences and restrictions in respect of each class of
Shares
The Company's authorised capital consists of two classes of shares,
referred to as equity shares and preference shares, having par value of
Rs. 10/- and Rs. 100/- each respectively. Each holder of equity shares is
entitled to one vote per share. The preference shareholders have a
preferential right over equity share holders, in respect of repayment
of capital and payment of dividend. However, no such preference shares
have been issued by the Company during the years ended 31st March, 2011
& 31st March, 2012.
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.
Dividend per equity share proposed for the current year is Rs. 0.50
(Previous year: Rs. 0.75).
In the event of liquidation of the Company, the holders of equity
shares will be entitled to receive any of the remaining assets of the
company, after distribution of all preferential amounts. The
distribution will be in proportion to the number of equity shares held
by the shareholders.
1.3 Shares allotted as fully paid-up without payment being received in
cash / by way of bonus shares (during 5 years preceding 31st March,
2012)
Pursuant to amalgamation of Quippo Infrastructure Equipment Limited
(Transferor Company) into and with the Company, approved by the Equity
Shareholders of the Company and sanctioned by the Hon'ble High Court of
Calcutta on 18th January, 2011, the Company issued and allotted
92,915,839 equity shares of Rs. 10/- par value, as fully paid up bonus
shares, to the pre- amalgamation equity shareholders of the Company on
5th March, 2011.
Further, the Company issued and allotted 294,025,696 equity shares of Rs.
10/- par value, as fully paid-up, towards consideration for the
aforesaid amalgamation, to the shareholders of the Transferor Company
on 5th March, 2011. This includes 48,600,000 equity shares allotted to
Srei Growth Trust, a Trust settled by the Company on 4th March, 2011,
to receive equity shares of the Company in exchange of the Company's
shareholding in the Transferor Company. The beneficial interest in the
Trust amounting to Rs. 1,851.50 lakh, representing the cost of shares of
the Transferor Company, is shown under 'Non-Current Investments' in the
Balance Sheet.
2.1 Bond / Debt Redemption Reserve
During the year, the Company has created Bond / Debt Redemption Reserve
of Rs. 3,797 lakh (Previous year: Rs. 3,020 lakh) towards redemption of
Unsecured Subordinated Bonds / Debentures / Debt (Tier II Capital).
Debt Redemption Reserve of Rs. 792 lakh (Previous year: Rs. 792 lakh) has
been reversed due to repayment of Bond / Debt during the year.
During the year, the Company has also created Bond / Debt Redemption
Reserve of Rs. 21 lakh (Previous year: Rs. Nil) towards redemption of
Long-Term Infrastructure Bonds, which were raised during the year.
3.1 Long-Term Infrastructure Bonds à Secured, Redeemable,
Non-convertible Debentures
During the year, the Company has raised Rs. 2,489 lakh (Previous year: Rs.
Nil) through public issue of Long-Term Infrastructure Bonds in the
nature of Secured, Redeemable Non-Convertible Debentures, eligible for
deduction under section 80 CCF of the Income-Tax Act, 1961. Fund raised
has been utilised for the purposes of infrastructure lending as per the
terms of the issue.
* Includes current maturities
1 Secured against Receivables of the Company.
2 Secured against Receivables of the Company and mortgage of immovable
property. All the above debentures are redeemable at par.
* Includes current maturities
The above Term Loans are secured by charge on specific assets covered
by loan / lease agreements with customers and / or receivables arising
there from.
1 Includes Rs. 2,111 lakh (Previous year Rs. 2,372 lakh) guaranteed by
subsidiary company.
2 Includes loans of Rs. 14,333 lakh (Previous year Rs. 13,713 lakh)
guaranteed by Export Import Bank of the United States.
4.1 Public Deposits
In order to qualify for registration as an 'Infrastructure Finance
Company', the Company decided not to accept or renew public deposits
w.e.f. 20th April, 2010. The amount of public deposits outstanding as
on 19th April, 2010 (including matured and unclaimed deposits) along
with accrued and future interest thereof is kept in the form of a Fixed
Deposit, under lien, with Axis Bank Limited, a scheduled commercial
bank, for the purpose of making payment to the depositors. The
outstanding balance of the Fixed Deposit as at 31st March, 2012 is Rs. 88
lakh (Rs. 250 Lakh as at 31st March, 2011).
4.2 Buyer's credit from Banks (Foreign Currency Loan)
These foreign currency loans from banks are repayable by bullet payment
and have tenures ranging from 1-3 years. These loans are secured by
import documents covering title to capital goods and extension of pari
passu charge towards working capital facilities.
4.3 Unsecured Subordinated bonds / debentures (Tier II Capital)
During the year ended 31st March, 2012, the Company raised subordinated
debt qualifying for Tier II capital amounting to Rs. 35,000 lakh (31st
March, 2011: Rs. 5,000 lakh). The following table sets forth the details
of the outstanding as at 31st March, 2012:
(Rs. in Lakh)
*The interest rate is floating and is computed based on average yield
to maturity (YTM) calculated from the balance maturity of 12 year
Government of India (GOI) security paper for the remaining tenure of
the Bonds.
*Each bond is having an overall tenure of 12 years, reckoned from the
date of allotment. The bonds shall be redeemed at a premium of 20% of
the original face value.
5. DEFERRED TAX LIABILITIES (Net)
In terms of Accounting Standard 22, the net Deferred Tax Liability
(DTL) recognised during the year is Rs. 1,198 lakh (Previous year: Rs.
3,350 lakh). Consequently, the net DTL as at year-end stands at Rs. 7,988
lakh (31st March, 2011 Rs. 6,790 lakh). The break- up of major components
of net DTL is as follows:
6.1 Nature of certain provisions and their movement year-on-year.
Provision for non-performing assets (NPAs) is made in the financial
statements according to the Prudential Norms prescribed by RBI for
NBFCs. The Company also makes additional provision based on the
management's best estimate, to the extent considered necessary.
The Company creates a general provision at 0.25% of the standard assets
outstanding on the balance sheet date, as per the RBI Prudential Norms.
The following table sets forth the movement of aforesaid Provisions
year-on-year:
7.1 Working capital facilities from banks, including working capital
demand loans earmarked against such facilities, are secured by
hypothecation of underlying assets (short-term as well as long-term
loan assets) covered by hypothecation loan of agreements and operating
lease agreements with customers and receivables arising there from,
ranking pari passu (excluding assets specifically charged to others).
As per the prevalent practice, these facilities are renewed on a
year-to-year basis and therefore, are revolving in nature.
7.2 Short-Term Loans from banks are secured by charge on specific
assets covered by loan/ facility agreements with customers and / or
receivables arising there from.
7.3 Face value of Commercial Paper outstanding as at 31st March, 2012
is Rs. 67,850 lakh (as at 31st March, 2011 Rs. 26,120 lakh). Face value of
maximum outstanding at any time during the year ended 31st March, 2012
was Rs. 207,850 lakh (Previous year Rs. 63,500 lakh). Face value of
Commercial Paper repayable within one year is Rs. 67,850 lakh (Previous
year Rs. 26,120 lakh).
1 The Company has not received any memorandum from 'Suppliers' (as
required to be filed by the 'Suppliers' with the notified authority
under the Micro, Small and Medium Enterprises Development Act, 2006)
claiming their status as on 31st March, 2012 as micro, small or medium
enterprises. Consequently, the interest paid / payable by the company
to such Suppliers, during the year is Rs. Nil (Previous year: Rs. Nil).
1 Secured by underlying assets and in certain cases are additionally
secured by immovable properties and / or pledge of Equity Shares of the
borrowers by way of collateral security.
2 Includes Non-Performing Assets of Rs. 10,997 Lakh (Previous year Rs. Nil)
9. Contingent Liabilities And Commitments (to the extent not provided
for)
Particulars 31st March, 2012 31st March, 2011
Contingent Liabilities
Bank Guarantees1 1,707 1,929
Corporate Guarantee to Banks 13,815 4,795
Disputed Income Tax2 3,654 2,364
Fringe Benefit Tax3 226 226
Total 19,402 9,314
1 Includes Rs. 892 lakh (31st March, 2011: Rs. 1,017 lakh) issued on
Company's behalf by a Joint Venture Company.
2 Certain Assessment Orders disallowing Special Reserve (created as per
Section 45-IC of the RBI Act, 1934) and Debt Redemption Reserve for the
purpose of determining tax liability as per the provision of Section
115JB, Disallowances under section 14A, Disallowance of Provision for
NPA, Disallowance of Provision for earned leave encashment, matters
relating to deduction u/s 36(i)(viii), Upfront Fees on Borrowings and
Long-Term Capital Gain arising out of transaction under a Scheme of
Arrangement sanctioned by the Hon'ble Calcutta High Court on 28.01.08
have been challenged by the company before the appropriate authorities.
Pending disposal of the cases filed, the Company has not provided for
the Income Tax liabilities arising out of the same.
3 The Company has challenged the constitutional validity of Fringe
Benefit Tax (FBT) before the Hon'ble High Court at Calcutta and the
Hon'ble Court has granted interim stay on levy of such FBT on the
Company. In view of this, the Company has not provided for any
liability against FBT since its inception upto the date of its
abolition i.e., 31st March, 2009.
10. The Company has entered into Options / Swaps / Forward contracts
(being derivative instruments) which are not intended for trading or
speculation, for the purpose of hedging currency and interest rate
related risks. Options, Swaps and Forward contracts outstanding as at
year end are as follows:
11. Dividend Remitted In Foreign Currencies
The company remits the equivalent of the dividend payable to equity
shareholders and holders of GDRs. For GDR holders, the dividend is
remitted in Indian rupees to the custodian bank.
12. Leases
a. In the capacity of Lessee
(i) The Company has certain cancellable operating lease arrangements
for office premises, which range between 11 months to 15 years and are
usually renewable by mutual consent, on mutually agreeable terms. Lease
payments charged to the Statement of Profit and Loss with respect to
such leasing arrangements aggregate to Rs. 592 lakh (Previous year: Rs. 677
lakh).
Some of the above cancellable lease agreements have escalation clause
of 5% p.a. None of the operating lease agreements entered into by the
Company provide for any contingent rent payment and hence, the Company
has not paid any contingent rent in the current and previous year.
(ii) Further, the Company also has certain non-cancellable operating
lease arrangements for office premises, which range between 5 to 21
years and are usually renewable by mutual consent on mutually agreeable
terms. In respect of such arrangements, lease payments for the year
aggregating to Rs. 10 lakh (Previous year: Rs. 10 lakh) have been
recognised in the Statement of Profit and Loss.
(iii) Sub lease payments received (or receivable) recognised in the
Statement of Profit and Loss for the year is Rs. 1,701 lakh (Previous
year: Rs. 1,451 lakh). Future minimum sublease payments expected to be
received under non-cancellable subleases as at 31st March, 2012 is Rs.
887 lakh (31st March, 2011: Rs. 1,327 lakh).
b. In the capacity of Lessor
The Company has given assets on Operating lease (refer note 12) for
periods ranging between 5 to 15 years. Some of these lease agreements
stipulate rental computation on the basis of earnings of the Lessee.
Such contingent rent recognised during the year is Rs. 1,514 lakh
(Previous year Rs. Nil).
(g) The estimate of future salary increase, considered in actuarial
valuation, takes account of inflation, seniority, promotion and other
relevant factors such as supply and demand in the employee market.
13. Related Party Disclosures Related Parties:
Subsidiaries & Step-down Subsidiaries: Country of Origin
Srei Capital Markets Limited India
Srei Venture Capital Limited India
Srei Infrastructure Advisors Limited India
Global Investment Trust Limited India
Controlla Electrotech Private Limited India
Srei Mutual Fund Asset Management Private Limited India
Srei Mutual Fund Trust Private Limited India
IIS International Infrastructure Services GmbH, Germany Germany
Srei Forex Limited India
Srei Insurance Broking Private Limited (Subsidiary w.e.f. 31.03.2012)
India
Srei Sahaj e-Village Limited India
Bengal Srei Infrastructure Development Limited (Subsidiary of Srei
Infrastructure Advisors Limited) India
Quippo Infocomm Limited (ceased to be a subsidiary of Srei
Infrastructure
Advisors Limited w.e.f 16.07.2011) India
Hyderabad Information Technology Venture Enterprises Limited
(Subsidiary of Srei Venture Capital Limited) India
Cyberabad Trustee Company Pvt. Limited (Subsidiary of Srei Venture
Capital Limited) India
ZAO Srei Leasing, Russia (Subsidiary of IIS International
Infrastructure Services GmbH, Germany) Russia
Srei Advisors Pte Limited, Singapore (Subsidiary of IIS International
Infrastructure
Services GmbH, Germany) Singapore
Quippo Valuers and Auctioneers Private Limited India
Quippo Oil & Gas Infrastructure Limited India
Quippo Energy Private Limited India
Quippo Construction Equipment Limited India
Mumbai Futuristic Economic Zone Private Limited India
Quippo Prakash Marine Holdings Pte. Limited (Subsidiary of Quippo Oil &
Gas Infrastructure Limited) Singapore
Quippo Prakash Pte. Limited (Subsidiary of Quippo Prakash Marine
Holdings Pte. Limited) Singapore
Quippo Holding Cooperatief U.A. (Subsidiary of Quippo Oil & Gas
Infrastructure Limited, liquidated on 13.02.2012) Netherlands
Quippo International B.V. (Subsidiary of Quippo Holding Cooperatief
U.A., liquidated on 13.02.2012) Netherlands
Quippo Energy Middle East Limited (Subsidiary of Quippo Energy Private
Limited) Dubai
Quippo Energy Yemen Limited (Subsidiary of Quippo Energy Private
Limited) Yemen
Kasco Steel Limited(ceased to be a subsidiary of Quippo Construction
Equipment Limited w.e.f. 22.09.2011) India
Quippo Mara Infrastructure Limited (Subsidiary of Quippo International
B.V., Ceased to be
Sub-subsidiary w.e.f. 13.02.2012 on account of liquidation of its
holding company) British Virgin Islands
Quippo Mauritius Private Limited (Subsidiary of Quippo Energy Private
Limited w.e.f. 05.03.2012) Mauritius
Quippo Energy Nigeria Private Limited (Subsidiary of Quippo Mauritius
Private Limited w.e.f. 22.03.2012) Nigeria
14. Assets for Operating lease include gross value of assets pending
to be leased out, amounting to Rs. Nil (Previous year Rs. 6,487 lakh).
15. Loans & Advances include Loan of Rs. 3,175 lakh (Previous year Rs.
1,199 lakh) due from a private company having at least one common
director with the Company.
16. Information as required by Non-Banking Financial (Non-Deposit
Accepting or Holding) Companies Prudential Norms (Reserve Bank)
Directions, 2007 is furnished vide Annexure à II and III attached
herewith.
17. As notified by the Ministry of Corporate Affairs of the Government
of India, revised Schedule VI under the Companies Act, 1956 is
applicable to all financial statements for the financial year
commencing on or after 1st April, 2011. Accordingly, the financial
statements for the year ended 31st March, 2012 are prepared in
accordance with the aforesaid revised Schedule VI.
18. Figures pertaining to the previous year have been rearranged /
regrouped, reclassified and restated, wherever necessary, to make them
comparable with those of current year.
Mar 31, 2011
1. Scheme of Amalgamation
The Board of Directors of the Company at its meeting held on 28th
January, 2010 had, based on the recommendation of the Committee of
Independent Directors, approved amalgamation of Quippo Infrastructure
Equipment Limited (Transferor Company) into and with the Company in
terms of a Scheme of Amalgamation (the Scheme) under Sections 391 to
394 of the Companies Act, 1956. The Scheme was approved by the Equity
Shareholders of the Company in the meeting held on 31st May, 2010,
convened by the Honble High Court at Calcutta (the Court).
Pursuant to the sanction of the scheme by the Court vide its Order made
on January 18, 2011, all the assets, rights, obligations, liabilities
and the entire business of the Transferor Company were transferred to
and vested in the Company, as a going concern with effect from 1st
April, 2010 (Appointed Date) and accordingly, the sanctioned Scheme
has been given effect to in these financial statements. The Transferor
Company alongwith its subsidiaries had been primarily engaged in the
business of infrastructure equipment rental and matters incidental and
ancillary thereto.
As per the Scheme of Amalgamation, the Effective Date is the date on
which all the conditions and matters referred to in the Scheme are
fulfilled and the Scheme becomes operative and effective from the
Effective Date. All the conditions and matters prescribed in the Scheme
were fulfilled on 4th March, 2011. Accordingly, the Scheme became
effective from 4th March, 2011. Pending completion of relevant
formalities of transfer of certain assets and liabilities acquired
pursuant to the Scheme, in the Companys name, such assets and
liabilities remain included in the books of the Company in the name of
the Transferor.
In accordance with the Scheme and as per the sanction by the Court:
a) The Company has issued and allotted 92,915,839 equity shares of Rs.
10/- each fully paid up as bonus shares to the pre- amalgamation equity
shareholders of the Company in the ratio of 4:5, by way of
capitalisation of Securities Premium on 5th March, 2011.
b) Further, the Company has issued and allotted 294,025,696 equity
shares of Rs. 10/- each fully paid up as consideration for the
amalgamation to the shareholders of the Transferor Company on 5th
March, 2011.
c) A Trust in the name of "Srei Growth Trust" has been settled by the
Company on 4th March, 2011 to inter alia, receive equity shares of the
Company in exchange of the Companys shareholding in the Transferor
Company. The Company, in lieu of its shareholding in the Transferor
Company, is entitled to be allotted equity shares of itself on
amalgamation. However, since a company cannot hold its own shares, the
Company settled the aforesaid Trust to hold such shares. Consequently,
48,600,000 equity Shares of the Company of Rs.10/- each fully paid up
were issued and allotted to Srei Growth Trust, which is holding such
shares in trust for the benefit of the Company and/or the shareholders
of the Company. The beneficial interest in the Trust amounting to Rs.
1,851.50 Lakh representing the cost of shares of the Transferor Company
is shown under Investments in the Balance Sheet.
d) Accounting for Amalgamation:
The amalgamation of Transferor Company with the Company has been
accounted for on the basis of the Purchase Method as stated in the
Accounting Standard (AS) -14 on Accounting for Amalgamations as
below:
(i) All assets and liabilities of the Transferor Company were
transferred to and vested in the Company at their respective fair
values as on 31st March 2010, w.e.f. 1st April, 2010.
(ii) Excess of the fair value of net assets taken over by the Company,
over the paid up value of Equity Shares issued & allotted to the
shareholders of the Transferor Company, being Rs. 137,870 Lakh has been
credited to General Reserves of the Company. Had the Scheme, sanctioned
by the Court, not prescribed this accounting treatment, this amount
would have been credited to Capital Reserve, with no impact on net
profit for the year.
(iii) Inter Company balance of Rs. 100 Lakh on account of loan given by
the Company to the Transferor Company has been cancelled.
(iv) The Authorised Share Capital of the Company has increased from Rs.
70,000 Lakh to Rs. 81,000 Lakh divided into 710,000,000 Equity Shares of
Rs. 10/- each and 10,000,000 Preference Shares of Rs. 100/- each.
In view of the above, the figures of current year are not comparable
with those of the previous year.
2. Tier II Capital
Unsecured Subordinated Redeemable Non Convertible Bonds
2.1 During the year, the Company has allotted 500 Unsecured
Subordinated Redeemable Non-Convertible Bonds in the nature of
Debentures of face value Rs. 10 Lakh each on private placement basis,
forming part of Tier II Capital, aggregating to Rs. 5,000 Lakh for cash
at par on 10th November, 2010.
Each bond is having an overall tenure of 10 years, reckoned from the
date of allotment. The bonds shall be redeemed at face value at the end
of 10 years from the date of allotment i.e. 10th November, 2020.
Interest is payable semi annually @ 10.50% p.a.
2.2 The Company has allotted 2,000 Unsecured Subordinated Redeemable
Non-Convertible Bonds in the nature of Debentures of Rs. 10 Lakh each on
private placement basis forming part of Tier II Capital aggregating to
Rs. 20,000 Lakh for cash at par on 23rd March, 2010.
Each bond is having an overall tenure of 10 years, reckoned from the
date of allotment. The bonds shall be redeemed at face value at the end
of 10 years from the date of allotment i.e. 23rd March, 2020. Interest
is payable semi annually @ 10.20% p.a.
2.3 The Company has allotted 500 Unsecured Subordinated Redeemable Non-
Convertible Bonds in the nature of Debentures of Rs. 10 Lakh each on
private placement basis forming part of Tier II Capital aggregating to
Rs. 5,000 Lakh for cash at par on 30th March, 2007.
Each bond is having an overall tenure of 10 years, reckoned from the
date of allotment. The bonds shall be redeemed at face value at the end
of 10 years from the date of allotment i.e. 29th March, 2017. Interest
is payable annually @ 12% p.a.
2.4 The Company has allotted 5,266,075 Unsecured Subordinated Bonds to
the equity shareholders in the nature of Tier II Capital of Rs. 100 each
aggregating to Rs. 5,266 Lakh for cash at par on 25th August, 2000 on
rights basis.
Each bond is having an overall tenure of 12 years, reckoned from the
date of allotment. The bonds shall be redeemed in 7 installments at a
premium of 20% of the original face value starting from 6th year on
25th August, 2006 at the rate of 15% of the face value and premium
thereon for 6 years and balance 10% in the year thereafter.
The fifth such installment of Rs. 948 Lakh representing 15% of the face
value together with 20% of the premium towards redemption has been paid
on 25th August, 2010. The face value of the aforesaid Bonds stands
reduced to Rs. 25/- per Bond.
Premium payable on redemption of these Subordinated Bonds is provided
over the tenure of the bond.
The unsecured subordinated bonds redeemable within one year amounts to
Rs. 790 Lakh (Previous year Rs. 790 Lakh)
3. Borrowings
3.1 Working Capital facilities from banks are secured by hypothecation
of assets covered by hypothecation agreements and operating lease
agreement with the customers and receivables arising therefrom ranking
pari passu (excluding assets which are specifically charged to others).
3.2 Term loans from Foreign Banks & Foreign Financial Institutions are
secured by hypothecation of specific assets covered by hypothecation
agreements and operating lease agreements with the customers and
receivables arising therefrom.
3.3 Term loans from Domestic Banks are secured by
hypothecation/assignment of specific assets covered by hypothecation
agreements and operating lease agreements and receivables arising
therefrom.
3.4 In April 2010, the Company decided to convert itself into a
non-deposit taking NBFC in order to qualify for registration as an
Infrastructure Finance Company and hence the Company decided not to
accept or renew public deposits w.e.f. 20th April, 2010. The amount of
public deposits outstanding as on 19th April, 2010 (including matured
and unclaimed deposits) along with accrued and future interest thereof
has been kept in the form of a Fixed Deposit, under lien, with Axis
Bank Limited, a scheduled commercial bank, for the purpose of making
payment to the depositors. The outstanding balance of the Fixed Deposit
as on 31st March, 2011 is Rs. 250 Lakh. Public deposits (including
matured and unclaimed deposits) repayable within one year, aggregate to
Rs. 71 Lakh (previous year Rs. 468 Lakh).
3.5 Unsecured Short Term Loans and Advances represent amount repayable
within one year amounting to Rs. 37,991 Lakh (Previous year Rs. 12,145
Lakh).
3.6 The Company has issued Non-Convertible Debentures (NCDs) on private
placement basis aggregating to Rs. 820,500 Lakh during the year ended
31st March, 2011 (Previous year Rs. 637,300 Lakh).
3.7 Face value of Commercial Paper outstanding as at 31st March, 2011
is Rs. 26,120 Lakh (as at 31st March 2010 Rs. 12,500 Lakh). Face value of
maximum outstanding at any time during the year ended 31st March, 2011
was Rs. 63,500 Lakh (Previous year Rs. 18,000 Lakh). Face value of
Commercial Paper repayable within one year is Rs. 26,120 Lakh (Previous
year Rs. 12,500 Lakh).
4. Debt Redemption Reserve
During the year, the Company has created Debt Redemption Reserve of Rs.
3,020 Lakh (Previous year Rs. 742 Lakh) towards redemption of Unsecured
Subordinated Bonds/ Debentures/ Debt (Tier II Capital). Debt Redemption
Reserve of Rs. 792 Lakh (Previous year Rs. 792 Lakh) has been reversed due
to repayment of loan during the year.
5. Securitisation
No securitisation contract has been entered into by the Company during
the current and previous year.
6. Provisioning / Write-off of assets
Provision for non performing assets (NPAs) is made in the financial
statements according to the Prudential Norms prescribed by RBI for
NBFCs. Additional provision of 0.25% on Standard assets has also been
made during the year, as per a new stipulation of RBI on Standard
assets. The Company also makes additional provision towards loan
assets, based on the managements best estimate, unlike previous years
when provision on loan assets was made as per the norms of Foreign
Financial Institutions (FFIs).
7. Leasing Arrangements
a. In the capacity of Lessee
(i) The Company has certain cancellable operating lease arrangements
for office premises, which range between 11 months to 15 years and are
usually renewable by mutual consent on mutually agreeable terms. Lease
payments charged to the Profit and Loss Account with respect to such
leasing arrangements aggregate Rs. 677 Lakh (Previous year Rs. 433 Lakh).
(ii) Further, the Company also has certain non-cancellable operating
lease arrangements for office premises, which range between 5 to 21
years and are usually renewable by mutual consent on mutually agreeable
terms. In respect of such arrangements, lease payments for the year
aggregating to Rs. 10 Lakh (Previous year Rs. 10 Lakh) have been recognised
in the Profit & Loss Account.
Some of the above cancellable and non-cancellable lease agreements have
escalation clause of 5% p.a. None of the operating lease agreements
entered into by the Company provide for any contingent rent payment and
hence, the Company has not paid any contingent rent in the current and
previous year.
(iii) Sub lease payments received (or receivable) recognised in the
Profit and Loss Account for the year is Rs. 1,451 Lakh (Previous year Rs.
642 Lakh). Future minimum sublease payments expected to be received
under non-cancellable subleases as at 31st March, 2011 is Rs. 1,327 Lakh
(Previous year Rs. Nil).
b. In the capacity of Lessor
The Company has given assets on Operating lease (Refer Schedule 5 to
Balance Sheet) for periods ranging between 5 to 15 years. These
agreements for Operating leases do not have a clause for contingent
rent and hence, the Company has not recognised any contingent rent as
income in the current and previous year.
8. Assets for Operating lease include gross value of assets pending to
be leased out, amounting to Rs. 6,487 Lakh (Previous year Rs. Nil).
9. Loans & Advances include Loan of Rs. 1,199 Lakh (Previous year Rs.
3,793 Lakh) due from a private company having at least one common
director with the Company.
10. Impairment of Fixed Assets
None of the Companys Fixed Assets are considered impaired as on the
Balance Sheet date.
11. Disclosure pursuant to Accounting Standard (AS) 15 (Revised) -
Employee Benefits
Contribution to Regional Provident Fund Authority charged to Profit and
Loss Account during the year is Rs. 143 Lakh (Previous year Rs. 104 Lakh).
Contribution to Employee State Insurance Corporation charged to Profit
and Loss Account is Rs. 1.02 Lakh (Previous year Rs. 0.19 Lakh).
Gratuity benefit to employees has been funded under separate
arrangement with the Life Insurance Corporation of India (LIC).
The following table sets out the details of amount recognised in the
financial statements in respect of employee benefit schemes.
The Company has adopted the actuarial valuation for sick leave benefit
from the current financial year. The profit for the year would have
been higher by Rs. 50 Lakh had the valuation method not been changed.
The estimates of future salary increase, considered in actuarial
valuation, take into account inflation, seniority, promotion and other
relevant factors such as supply and demand in the employment market.
12. The Company has not received any memorandum from Suppliers (as
required to be filed by the Suppliers with the notified authority
under the Micro, Small and Medium Enterprises Development Act, 2006)
claiming their status as on 31st March 2011 as micro, small or medium
enterprises. Consequently, the amount paid / payable to these parties
during the year is Rs. Nil (Previous year Rs. Nil).
13. Interest income includes Rs. 12 Lakh (Previous year Rs. 26 Lakh) on
long term investments.
14. Deferred Tax
In terms of Accounting Standard 22, net deferred tax liability (DTL) of
Rs. 3,350 Lakh (Previous year Rs. 3,440 Lakh) has been recognised during
the year and consequently, the net DTL as at March 31, 2011 stands at Rs.
6,790 Lakh (as at March 31, 2010 Rs. 3,440 Lakh).
19. Capital Work-in-Progress Rs. 599 Lakh represents advance against
capital expenditure (previous year Rs. Nil).
20. Contingent Liabilities
(Rs. in Lakh)
Particulars As at 31st March,
2011 As at 31st March,
2010
a. Bank Guarantees @ 1,929 4,575
b. Corporate Guarantee to Banks 4,795 1,095
c. Disputed income tax and Interest
tax demand # 2,364 1,878
d. Fringe Benefit Tax ## 226 -
Total 9,314 7,548
@ includes Rs. 1,017 Lakh (previous year Rs. 1,326 Lakh) issued on
Companys behalf by a Joint Venture Company.
# The Assessment Orders disallowing Special Reserve (created as per
Section 45IC of the RBI Act, 1934) and Debt Redemption Reserve for the
purpose of determining tax liability as per the provision of Section
115JB, Disallowances under section 14A, Disallowance of Provision for
NPA, Provision for earned leave encashment and Interest on certain
loans under the normal provisions of the Income Tax Act have been
challenged by the company before the appropriate authorities. Pending
disposal of the cases filed, the Company has not provided for the
Income Tax liabilities arising out of the same.
## The Company has challenged the constitutional validity of Fringe
Benefit Tax (FBT) before the Honble High Court at Calcutta and the
Honble Court has granted interim stay on levy of such FBT on the
Company. In view of this, the Company has not provided for any
liability against FBT since its inception upto the date of its
abolition i.e., 31st March, 2009.
*Refer Note II 25 of Schedule 18
# The amounts are receivable on demand.
The outstanding loans and advances are interest bearing except that of
Controlla Electrotech Private Ltd.
22. Other financial charges include Rs. 2,281 Lakh (Previous year Rs.
1,264 Lakh) towards upfront fees on loan processing and Rs. 2,327 Lakh
(Previous year Rs. 175 Lakh) towards interest on Commercial paper.
Similarly, Quippo Valuers and Auctioneers Private Limited (Formerly
GoIndustry Quippo Valuers and Auctioneers Private Limited) (QVAPL)
which was a 50:50 joint venture between Quippo and Go Industry Limited,
UK became a Joint Venture between the Company and Go Industry Limited,
UK w.e.f. March 04, 2011. Thereafter, the entire shareholding of Go
Industry Limited, UK has been acquired by the Company and consequently,
QVAPL has become a 100% subsidiary of the Company w.e.f. March 31,
2011. The name has been changed to "Quippo Valuers and Auctioneers
Private Limited" w.e.f. April 16, 2011.
28. Uncalled liability on partly paid shares held as stock for trade
is Rs. 1 lakh, net of advance (Previous year Rs. Nil).
29. Information as required by Non-Banking Financial (Non-Deposit
Accepting or Holding) Companies Prudential Norms (Reserve Bank)
Directions, 2007 is furnished vide Annexure à II & III attached
herewith.
33. The Company has been classified by RBI as Infrastructure Finance
Company à Non Deposit Taking within the overall classification of Non
Banking Finance Company w.e.f. 31st March, 2011.
34. Previous years financial statements have been audited by M/s
Deloitte Haskins & Sells, Chartered Accountants.
35. Previous years figures have been regrouped / rearranged, wherever
considered necessary.
Mar 31, 2010
1. Issue of Warrants on Preferential Allotment basis
The Company on 30th October, 2007 issued and allotted 25,000,000
warrants of Rs. 10/- each to the Promoters Group of the Company by way
of Preferential Allotment . Each warrant was convertible into Equity
shares of Rs. 10/- each in one or more tranches at a price of Rs. 100/-
per share (including premium of Rs. 90/-) within a period of 18 months
from the date of allotment of the warrants.
Out of 25,000,000 warrants, conversion option for 7,200,000 warrants
was exercised in 2007-08. Conversion option for balance 17,800,000
warrants were not exercised during the year ended 31st March, 2009 and
has since expired and hence forfeited on 29th April, 2009. The amount
of Rs. 1,780 Lakh received as subscription money has been transferred
to Capital Reserve.
2. Tier II Capital
2.1 Unsecured Subordinated Redeemable Non Convertible Bonds
2.1.1 During the year, the Company has allotted 2,000 Unsecured
Subordinated Redeemable Non-Convertible Bonds in the nature of
Debentures of Rs. 10 Lakh each on private placement basis forming part
of Tier II Capital aggregating to Rs. 20,000 Lakh for cash at par on
23rd March, 2010.
Each bond is having an overall tenure of 10 years, reckoned from the
date of allotment. The face value of the bonds shall be redeemed at the
end of 10 years from the date of allotment i.e. 23rd March, 2020.
Interest is payable semi annually @ 10.20% p.a.
2.1.2 The Company has allotted 500 Unsecured Subordinated Redeemable
Non- Convertible Bonds in the nature of Debentures of Rs. 10 Lakh each
on private placement basis forming part of Tier II Capital aggregating
to Rs. 5,000 Lakh for cash at par on 30th March, 2007.
Each bond is having an overall tenure of 10 years, reckoned from the
date of allotment. The face value of the bonds shall be redeemed at the
end of 10 years from the date of allotment i.e. 29th March, 2017.
Interest is payable annually @ 12% p.a.
2.1.3 The unsecured subordinated redeemable non convertible bonds
repayable within one year amounts to Rs Nil (Previous year Nil).
2.2 Unsecured Subordinated Bonds
2.2.1 The Company has allotted 5,266,075 Unsecured Subordinated Bonds
to the equity shareholders in the nature of Tier II Capital of Rs. 100
each aggregating to Rs. 5,266 Lakh for cash at par on 25th August, 2000
on right basis.
Each bond is having an overall tenure of 12 years, reckoned from the
date of allotment. The face value of the bonds shall be redeemed in 7
installments at a premium of 20% of the original face value starting
from 6th year on 25th August, 2006 at the rate of 15% of the face value
and premium thereon for 6 years and balance 10% in the year thereafter.
The fourth such installment of Rs. 948 Lakh representing 15% of the
face value together with 20% of the premium towards redemption has been
paid on 25th August, 2009 being fourth redemption date. The face value
of the aforesaid Bonds stands reduced to Rs. 40/- per Bond.
Premium payable on redemption of these Subordinated Bonds is provided
over the tenure of the bond.
2.2.2 The unsecured subordinated bonds redeemable within one year
amounts to Rs. 790 Lakh (Previous year Rs. 790 Lakh)
3. Loans
3.1 Working Capital facilities from banks are secured by hypothecation
of assets covered by loan assets/ hypothecation/ Operating Lease
agreements and receivables arising there from ranking pari passu
(excluding assets which are specifically charged to others).
3.2 Term loan from Foreign Banks & Foreign Financial Institutions are
secured by hypothecation of specific assets covered by loan assets/
hypothecation agreements and Operating Lease agreement and receivables
arising there from.
3.3 Term loan from Domestic Banks are secured by
hypothecation/assignment of specific assets covered by loan assets/
hypothecation agreements and Operating Lease agreement and receivables
arising there from.
3.4 Public Deposits are secured by pledge of certain Government
Securities as per RBI Circular dated 04.01.2007. Public Deposits
(including matured and unclaimed) repayable within one year aggregate
to Rs. 468 Lakh (Previous year Rs. 488 Lakh).
3.5 Secured Loans and advances from Domestic Banks include Rs Nil Lakh
(Previous year Rs. 30,000 Lakh) guaranteed by the directors.
3.6 Unsecured Short Term Loans and Advances include amount repayable
within one year amounting to Rs. 12,650 Lakh (Previous year Rs. 11,204
Lakh).
4. In accordance with the Accounting Standard 19 on Leases as
notified by the Companies (Accounting Standards) Rules, 2006 the
following disclosures in respect of Operating Leases is made :
a. In the capacity of Lessee
The Company has leasing arrangements in respect of operating leases for
office premises. These leasing arrangements which are not
non-cancellable in nature range between 11 months and 21 years,
generally and are usually renewable by mutual consent on mutually
agreeable terms. Minimum lease payments charged to the Profit and Loss
Account with respect to the leasing arrangements referred to above
aggregate Rs. 443 Lakh (Previous year Rs. 150 Lakh).
Sub lease payments received or receivable recognised in the Profit and
Loss Account for the year ended 31 March, 2010 aggregates Rs. 642 Lakh
(Previous year Rs. 464 Lakh).
b. In the capacity of Lessor
The Company has given assets on Operating lease for periods ranging
between 5 to 6 years based on the nature of equipment.
5. The Company is of the opinion that Service-tax on property rental
received is not payable based on legal opinion obtained and accordingly
is not collecting Service-tax on such rental received.
6. Loans & Advances include amounts of Rs. 3,793 Lakh (Previous year
Rs. 2,528 Lakh) due from private companies having at least one common
director with the Company.
7. None of the Companys Fixed Assets are considered impaired as on
the Balance Sheet date.
8. Disclosure pursuant to Accounting Standard (AS) 15 (Revised):
Contribution to Regional Provident Fund Authority charged to Profit and
Loss Account aggregates to Rs. 104 Lakh (Previous year Rs. 28 Lakh).
Besides, Rs.1 Lakh (Previous year Rs. 14 Lakh) has been paid to ÃSrei
International Finance Provident Fund Trustà towards Companys share of
shortfall between the return from the investments of the trust and the
Government notified interest rate. Contribution to Employee State
Insurance Corporation charged to Profit and Loss Account aggregates to
Rs. 0.19 Lakh (Previous year Rs. 0.07 Lakh).
9. The Company has challenged constitutional validity of Fringe
Benefits Tax before the Honble High Court at Calcutta and the Honble
Court has granted interim stay on levy of such Fringe Benefits Tax on
the Company. In view of this, the Company has not provided for any
liability against Fringe Benefits Tax till 31st March, 2009. However,
consequent upon abolition of Fringe Benefit Tax from Financial Year
2009-10, no liability arises for the year.
10. No interest was payable by the Company during the year to the
suppliers covered under the Micro, Small and Medium Enterprises
Development Act, 2006. The above information takes into account only
those suppliers who have responded to enquiries made by the Company for
this purpose.
11. Interest income includes Rs. 26 Lakh (Previous year Rs. 27 Lakh)
on long term investments.
12. Interest from Government Securities/Banks, Loan Assets, fee based
income and other income wherever applicable includes tax deducted at
source of Rs. 2,268 Lakh (Previous year Rs. 1,029 Lakh).
* recognised to the extent of deferred tax liability
16.2 Provision for Income Tax has been computed on the basis of Minimum
Alternate Tax (MAT) in accordance with Sec 115JB of the Income Tax Act,
1961. Considering the future profitability and taxable positions in the
subsequent years, the Company has recognised MAT credit entitlement
of Rs. 2,190 Lakh (Previous year Rs. 211 Lakh) as an asset by crediting
to the Profit and Loss account an equivalent amount and included under
ÃLoans & Advancesà in accordance with the Guidance Note on ÃAccounting
for credit available in respect of Minimum Alternate Tax under Income
Tax Act, 1961Ã issued by The Institute of Chartered Accountants of
India.
(c) Salary includes provision of Rs. 35 Lakh (Previous year Rs. 35
Lakh) towards commission payable to non-executive directors of the
Company, in terms of approval from Shareholders and Central Government.
(d) Provision for gratuity in respect of Directors is not included
above, as actuarial valuation is done on an overall basis.
13. Contingent Liabilities (Rupees in Lakh)
Particulars As at As at
31st March, 2010 31st March, 2009
a. Bank Guarantee 4,575 3,088
b. Corporate Guarantee to bank 1,095 5,180
c. Disputed income tax demand for
AY 2006-07 # 82 287
d. Disputed income tax demand for
AY 2007-08 # 389 462
e. Disputed income tax demand for
AY 2008-09 # 1,407 -
Total 7,548 9,017
# The Assessment Orders disallowing Special Reserve (created as per
Section 45IC of the RBI Act, 1934) and Debt Redemption Reserve for the
purpose of determining tax liability as per the provision of Section
115JB, Disallowances under section 14A, Disallowance of Provision for
NPA, Provision for earned leave encashment and Interest on certain
loans under the normal provision of the Income Tax Act have been
challenged by the company before the appropriate authorities. Pending
disposal of the cases filed, the Company has not provided for the
Income Tax liabilities arising out of the same.
14. The Company is a Non Banking Finance Company (NBFC) and being
currently classified as Asset Finance Company (Deposit Taking). In
terms of Reserve Bank of India (RBI) Circular
DNBS.PD.CC.No.168/03.02.089/2009-10 dated 12th February, 2010, the
Company has approached RBI for change in classification as
Infrastructure Finance Company (IFC) based on the asset pattern for the
year ended 31st March, 2009. However the Company has been advised by
RBI to convert into non deposit taking NBFC in order to qualify for
classification as IFC in terms of the captioned circular. Accordingly,
the Company has complied with the steps advised by RBI and has
requested RBI for change in classification as Infrastructure Finance
Company.
As a result, the Company has decided that it would not accept any
further public deposits or renew the maturing deposits in any manner
w.e.f. 20th April, 2010.
15. The Board of Directors of the Company at its meeting held on 28th
January, 2010 has, based on the recommendation of the Committee of
Independent Directors, approved amalgamation of Quippo Infrastructure
Equipment Limited (Quippo) into and with the Company in terms of a
Scheme of Amalgamation under Sections 391 to 394 of the Companies Act,
1956. The Appointed Date of the amalgamation shall be 1st April, 2010.
16. Previous year figures have been regrouped / rearranged, wherever
considered necessary.
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