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STCI Finance Limited
21st Annual Report2014-2015
STCI FINANCE LIMITED
21st Annual Report For The Year Ended 31st March, 2015
STCI FINANCE LIMITED
(Formerly known as Securities Trading Corporation of India Limited)
3
I. STCI Finance Limited 04-128
II. Consolidated Accounts 131-182
III. STCI Primary Dealer Limited 183-262
IV. STCICommoditiesLimited 263-295
STCI FINANCE LIMITED
(Formerly known as Securities Trading Corporation of India Limited)
4
01 Directors’ Report 07
02 Auditors’ Report 62
03 Auditors’ Report to Directors 68
04 C&AGReport 69
05 BalanceSheet 70
06 ProfitandLossStatement 72
07 Notes to Financial Statements 74
08 SignificantAccountingPolicies 99
09 NotesFormingPartofFinancialStatements 105
10 CashFlowStatement 125
11 Form AOC- 1 127
12 ListofShareholders 128
Contents
I. STCI FINANCE LIMITED
STCI FINANCE LIMITED
(Formerly known as Securities Trading Corporation of India Limited)
5
Corporate InformationBoard of Directors : Mrs. V. R. Iyer,Chairperson (Upto 31.05.2015)
Mr. T. C. Venkat Subramanian, Director
Mr.JayantSinha,Director (Upto 11.11.2014)
Mr.K.NarasimhaMurthy,Director
Mr. S. Ravi, Director
Mr. T. V. Rao, Director (w.e.f. 28.04.2015)
Mrs.ThankomTMathew (w.e.f. 27.08.2015)
Mr.S.Venkateswarlu,ManagingDirector (Upto 30.04.2015)
Mr.YogeshGaat,ManagingDirector&CEO (w.e.f. 19.05.2015)
Mr. Ajeet Kumar, Deputy Managing Director (w.e.f. 29.05.2015)
Statutory Auditors : A. J. Shah&Co.FortChambers,C-Block, 65TamarindLane,Fort,Mumbai-400023
Bankers : HDFCBankLtd AndhraBank
BankofIndia KotakMahindraBank
CorporationBank StateBankofIndia
UnionBank AxisBank
Debenture Trustee: IDBITrusteeshipServicesLtd AsianBuilding,GroundFloor,17, R.KamaniMarg,BallardEstate,Mumbai-400001
Registered & : A/B1,802,A-Wing,8thFloor,MarathonInnova,Corporate Office MarathonNextgenCompound,Off.G.K.Marg, LowerParel(West), Mumbai 400 013.
STCI FINANCE LIMITED
(Formerly known as Securities Trading Corporation of India Limited)
6
BOARD OF DIRECTORS
Mrs. V. R. IyerChairperson
Upto31.05.2015
Mr. Jayant SinhaDirector
Upto 11.11.2014
Mr. T. C. Venkat Subramanian Director
Mr. K. Narasimha Murthy Director
Mr. S. Ravi Director
Mr. T. V. Rao Director
w.e.f.28.04.2015
Mrs. Thankom T MathewDirector
w.e.f.27.08.2015
Mr. Ajeet KumarDeputy Managing Director
w.e.f.29.05.2015
Mr. S. VenkateswarluManaging DirectorUpto30.04.2015
Mr. Yogesh Gaat ManagingDirector&CEO
w.e.f.19.05.2015
STCI FINANCE LIMITED
(Formerly known as Securities Trading Corporation of India Limited)
7
DIRECTORS’ REPORT
TO THE SHAREHOLDERS OF
STCI FINANCE LIMITED
Your Directors have pleasure in presenting the Twenty First Annual Report and the audited accounts of the Company for the year ended March 31, 2015.
1. FINANCIAL RESULTS
` in CroreMarch 31, 2015 March 31, 2014
Total Income 461.23 351.89
Total Expenditure 283.83 207.66
Profit before dividend, tax and exceptional items 177.40 144.23
Dividend earned 1.99 1.18
Profit before tax and exceptional items 179.39 145.41
Exceptional Items 32.19 -
Profit before Tax 211.58 145.41
Less: Tax expenses 57.82 53.97
Profit after Tax for the year 153.76 91.44
CSR expenses 2.08 -
Profit available for appropriation 151.68 91.44
Add: Balance brought forward from last year 106.85 69.27
Amount available for appropriation 258.53 160.71
Transfer to statutory reserves* 30.76 18.29
Proposed Dividend 30.40 30.40
Provision for Dividend Distribution Tax 6.19 5.17
Balance carried to balance sheet 191.18 106.85
Total 258.53 160.71
Basic and diluted earning per share (`) 40.46 24.06
∗Created pursuant to Section 45 I /c of Reserve Bank of India Act, 1934 as amended in January 1997. This reserve forms part of free reserves, net owned funds and Tier I Capital.
STCI FINANCE LIMITED
(Formerly known as Securities Trading Corporation of India Limited)
8
2. FINANCIAL PERFORMANCE
In spite of challenging business environment, your Company’s performance during the year under review was satisfactory. The highlights of the performance during the financial year ended March 31, 2015 are as under:
l The total loan book grew by 30% to ` 3655.97 crore as on March 31, 2015 from ` 2805.25 crore as on March 31, 2014.
l The total operating revenue grew by 31% to ` 463.22 crore during the year ended March 31, 2015 from ` 353.06 crore in the previous year.
l The profit before tax was 46% higher at ` 211.58 crore as compared to ` 145.41 crore in the previous year.
l The profit after tax was 68% higher at ̀ 153.76 crore as compared to ̀ 91.44 crore in the previous year.
The profit before tax of ` 211.58 crore for the year ended March 31, 2015 includes an exceptional gain of ` 21.31 crore on subscribing to the buy-back offer of its wholly owned subsidiary, STCI Primary Dealer Ltd (STCI PD) and an exceptional income of ` 10.88 crore received from Administrator of the Specified Undertaking of Unit Trust of India (SUUTI) on account of arbitration award passed in favour of the company involving the purchase of UTI Securities Ltd. Higher net interest income attributable to the growth in the loan book, increased income from sale of securities and higher fee and other income contributed to the growth in the profits during the year under review.
3. DIVIDEND
Your Directors have recommended a dividend of 8% (` 8 per equity share) for the financial year ended March 31, 2015. If approved by shareholders at the Annual General Meeting, the dividend distribution will result in a cash outflow of ` 36.59 crore inclusive of Dividend Distribution Tax.
4. MANAGEMENT DISCUSSION & ANALYSIS
I. The Economy
The Indian economy grew by 7.3% in 2014-15 with improvement in the performance of service sector and manufacturing sector. The policy initiatives and reforms brought by Government of India, a stable macroeconomic environment and falling crude prices aided in the recovery of the economy. The Indian economy topped World Bank’s growth outlook for the year 2015-16 and projected growth at 7.5-8.3% in 2015-16. The external environment is benign and challenges in other major economies like China and Russia have made India the near-cynosure of eager investors.
A sharp slowdown in rural wage growth, a muted hike in minimum support prices, flat growth in NREGA allocations has led to sharp deterioration in agricultural terms of trade, exacerbated
DIRECTORS’ REPORT
STCI FINANCE LIMITED
(Formerly known as Securities Trading Corporation of India Limited)
9
further by the recent unseasonal rainfall in March 2015. These factors should lead to a slowdown in rural purchasing power. The government’s solution to the rural distress is likely to come in the form of construction-led spending rather than the legacy solutions like welfare based programs, farm loan waivers, higher subsidies etc.
Inflation has been on a downward trajectory now over the last one year with Consumer Prices (CPI) down at below 5.5% levels in later half of FY 2015 from 8% levels in last year. The decrease in commodity prices, especially crude prices had a positive impact on both the inflationary expectations and current account deficit (CAD). CPI is expected to remain below RBI’s target of 6% by January 2016 and CAD is likely to remain below 1% of GDP in FY 16. Further, benign crude oil prices, recent steps to reduce fuel subsidies through decontrol of diesel prices and direct transfer of LPG subsidies to bank accounts of beneficiaries can contain fiscal deficit to the targeted 3.9 % of GDP and further lower in next couple of years.
On the monetary policy front, RBI reduced the repo rates twice by 25bps each to 7.5% in the fiscal year 2014-15 and further reduced repo rate by 25 bps to 7.25% in June 2015 signalling a softening in its monetary policy stance. The major determinants of further rate cuts would be the transmission of the rate reduction, food inflation, impact of the US federal policy on emerging markets and the government policies to ease supply bottlenecks .
Looking ahead, it appears that the economy is headed for an upcycle of growth as interest rates are trending downward and inflation has been reigned in. These macro economic indicators coupled with buoyant business climate and consumer sentiments is likely to provide necessary impetus to economic growth.
II. NBFC Sector & Developments
Banking system credit growth was 12.6% for FY 2014-15 over FY 2013-14. In line with the expected marginal increase in GDP growth, the credit growth in banking system may remain at the current level of 12-14%. The NBFC sector has been gaining systemic importance in the recent years and the share of NBFC has steadily grown from 10.7% of banking assets in 2009 to 14.3% of banking assets in 2014. NBFCs typically have several advantages over banks due to their focus on niche segment, expertise in the specific asset classes, deeper penetration in the rural and unbanked markets. However, on the flip side, they depend to a large extent on bank borrowings, leading to high cost of borrowings and face competition from banks which have lower cost of funds. Due to subdued economic growth, last two years, have been challenging period for the NBFCs with moderation in rate of asset growth, rising delinquencies resulting in higher provisioning thereby impacting profitability. However, comfortable capitalisation levels and conservative liquidity management, continues to provide comfort to the credit profile of NBFCs in spite of impact on profitability.
The Reserve Bank of India (RBI) has been trying to strengthen the risk management framework in the sector, simplify the regulations and plug regulatory gaps so as to prevent regulatory arbitrage between banks and NBFCs. The RBI Regulations/ Policy initiatives during FY 2015 that impact
DIRECTORS’ REPORT
STCI FINANCE LIMITED
(Formerly known as Securities Trading Corporation of India Limited)
10
NBFCs in general are given below:
• RBI has issued a revised regulatory framework for NBFCs in November 2014 which broadly focuses on strengthening the structural profile of NBFC sector and regulating NBFCs that have increased their asset-size over time and gained systemic importance. The rules related to minimum net owned funds were tightened and the deposit acceptance ratio, capital norms, asset classification rules, provisioning requirement, and corporate governance and disclosure norms were made more stringent.
• RBI issued guidelines on lending against shares as the asset class posed a systemic risk in the in the event of default by borrower. NBFCs are now required to maintain an LTV ratio of 50% and accept only Group 1 securities (specified by SEBI) as collateral for loans with values of more than ` 5 lakh, subject to review. Further, all NBFCs with asset sizes of ` 100 crore and above are required to report on-line to stock exchanges, information on the shares pledged in their favour.
• Budget 2015-16 proposed that Asset financing NBFCs with assets of 500 crore and above will be treated as financial institution under the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest (SARFAESI) Act 2002. This will significantly improve their ability to force a collateral to recover dues from defaulting borrowers and bring the NBFCs in parity with other financial institutions, in matters relating to recovery.
• RBI has laid down framework for NBFCs for recognizing, classifying and reporting Special Mention Accounts (SMA) wherein there are early warning signals at par with banks so as to help them take corrective actions to address the stress before it turns into NPA.
III. Business Review
(i) Lending operations
STCI Finance Limited, a Systematically Important Non-Deposit taking Non-Banking Financial Company listed on the wholesale debt market segment of NSE has been primarily engaged in lending business. During the year under review, your company continued its focus in providing customized financial solutions to a wide spectrum of customers ranging from Corporates, firms and High Networth Individuals through its product offerings of Loan against securities/Promoter Funding and Corporate & other loan products such as Loan against property and Real Estate Developer loans. Total loan disbursements of ̀ 2289 crore were made during the year registering a growth of 43% over ` 1595 crore in the previous year. With a view to diversify the loan book, your Company’s main focus during the year was on corporate and other loan products such as developer loan, loan against property and project finance. The Company’s loan book grew by 30% to ̀ 3655.97 crore as on March 31, 2015 from a book size of ` 2805.25 crore as on March 31, 2014.
DIRECTORS’ REPORT
STCI FINANCE LIMITED
(Formerly known as Securities Trading Corporation of India Limited)
11
Details of the outstanding loan book as on March 31, 2015 are as under:
Particulars 31.03.2015(` in crore)
31.03.2014(` in crore)
Loan against shares/ Promoter Funding 2606.05(71%) 2330.18 (83%)
Corporate & other loan products (Loan against property, Real estate Developer loans etc)
1049.92 (29%) 475.07 (17%)
Total 3655.97 (100%) 2805.25 (100%)
The loan mix substantially improved during the year with increase in share of Corporate and other Loan book to 29% of the total loan book as on March 31, 2015 as against 17% at the end of the previous year and a reduction in share of the Loan against shares book to 71% as on March 31, 2015 from 83% at the end of the previous year. The net interest spread on the loan book was impacted during the year primarily on account of lower interest yield on the LAS portfolio due to lower short term interest rates. The gross non-performing assets increased during the year to 4.68% of the loan book as on March 31, 2015 from 1.10 % of the loan book as on March 31, 2014. The net non performing assets are at 4.09% of the loan book as on March 31, 2015 as against 0.88% of the loan book as on March 31, 2014.
(ii) Treasury operations
During the period under review, your Company generated a profit of `11.60 crore from sale of securities in the equity and fixed income securities segment as against ` 4.17 crore during the previous year, on account of larger exposure taken by the desk during most part of the year and timely booking of profits.
Segment wise performance of the Company
The segment wise results of Lending business and treasury operations are as under:
(`in crore)
Segment InformationLending Treasury
2014-15 2013-14 2014-15 2013-14
Total Revenue 404.71 300.84 49.38 49.69Segment Result Profit/Loss 156.06 130.99 27.45 24.87
(iii) Resource Mobilisation
During the year under review, your Company continued to use diverse sources of fundings by issue of Commercial Papers, Non-Convertible Debentures(NCDs), Bank line of Credit and CBLO borrowing towards adequate asset liability management. Your Company continued to augment its long term sources of funds through private placement of its 9.67% secured NCDs of ̀ 300 crore and 9.89% secured NCDs of ̀ 200 crore with maturity of 5 years in June 2014 and July 2014. Both the issues were fully subscribed by Provident Funds and various
DIRECTORS’ REPORT
STCI FINANCE LIMITED
(Formerly known as Securities Trading Corporation of India Limited)
12
corporates. During the year under review, the Company’s average cost of borrowing was 9.45% as against 9.42% in the previous year.
Your company has been regular in servicing all is debt obligations.
(iv) Credit rating
Your Company continues to enjoy the highest ratings of A1+ from rating agencies, CRISIL and ICRA, for its short term borrowing programme. The rating agencies, CARE and ICRA, have assigned AA rating for the long term secured NCD programme of the Company. ICRA has also assigned AA rating for its Bank’s Line of Credit.
(v) Capital To Risk Assets Ratio (CRAR)
The Company maintained CRAR well above the regulatory norms throughout the year. As on March 31, 2015, the CRAR is 23.68%. Although going forward, with growth in loan book, the CRAR is likely to slide, yet the same will remain well above the regulatory requirement.
(vi) Risk Management
Your Company, being in the business of lending and treasury operations has to manage various risks. The key risks faced by the Company are credit risk, liquidity risk, interest rate risk and operational risk. The company has in place policies and procedures for addressing the various risks associated with the Company’s lending business and treasury operations. The overall management of interest rate risk is carried out through the matching of the maturities of assets and liabilities, as a part of the Asset-Liability Management process. The Asset Liability Management Committee reviews and monitor these risks at periodic intervals. Any lending activity is exposed to credit risk arising from the risk of default by borrowers. The issuer has in place credit appraisal, credit risk monitoring and management systems. It undertakes a periodic review of its entire loan portfolio with a view to determine to identify potential areas of action and devise appropriate strategies thereon. The operational risks of the Company are managed through internal control systems and procedures and key back up processes.
(vii) Internal Financial Controls and their adequacy
Your Company has in place adequate internal financial control framework commensurate with the nature, size and scale of operations of the Company. A review of the overall internal financial controls was undertaken by the Internal Auditors during the year based on the the policies and procedures adopted for ensuring orderly and efficient conduct of its business, safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records and the timely preparation of reliable financial information and the same was found to be adequate vis-a vis the nature and scale of the operations.
DIRECTORS’ REPORT
STCI FINANCE LIMITED
(Formerly known as Securities Trading Corporation of India Limited)
13
(viii) Regulatory Compliance
Your Company has complied with all the applicable guidelines prescribed by RBI for NBFCs regarding accounting standards, income recognition, valuation of securities, capital adequacy, corporate governance etc and the applicable Guidelines prescribed by SEBI and no penalties or restrictions were imposed by any regulatory authority during the period.
(ix) HR Resources
The Company aims to recruit and retain talent in the organisation by providing a productive work place environment. With a view to strengthening its human resources, the Company has been recruiting professionals with appropriate skills and experience at middle and senior management levels. Recognising the importance of knowledge enrichment of its employees and exposing officers to the latest developments in the financial sector, the Company deputes its officers for appropriate training programmes, seminars and conferences. The Company’s HR functions have been outsourced to M/s Cerebrus Consultants who provide HR support by way of review of Company’s HR policies, Performance Linked Variable Scheme, Key Hiring Plan, new Employee Selection and On-Boarding, Skill and Capability building for employees and other regular HR management activities.
The staff strength on March 31, 2015 is 34.
(x) Outlook for the current year
The macro-economic environment in India is stable, reforms are continuing, the deceleration in growth has ended, the economy appears now to be recovering and the growth prospects are likely to improve in the current fiscal year.
Your company’s lending business is growing satisfactorily and steady growth is expected in the current year. Your Company will continue to diversify its loan book by increasing its focus on corporate loan and other loan products such as developer loan, loan against property, project finance etc. The current interest rate scenario and the rising competition with aggressive pricing strategy followed by competitors may, however, put pressure on the interest rate margin. Going forward, the Company will continue with its efforts in establishing itself as a preferred partner with quick turnaround time and best practices. The company proposes to enlarge its lending operations through launch of Retail Business resultantly distributing risk amongst a larger customer base and bringing more visibility in the revenue estimates.
The Debt market is likely to remain stable with price volatility being range bound. The bond yields would head lower on expectations of further monetary easing. The Fixed Income desk will capitalise the volatility in the market and capture the swings in the yields.
The gains from the equity market this year will be benign and will track the earnings growth, which are likely beginning the 3rd quarter of FY 2015-16. The equity desk will consolidate the equity portfolio and add stocks that have earning visibility for next couple of years.
Overall the outlook for your Company’s business is favourable and your Company is well poised to grow and capitalise on this opportunity.
DIRECTORS’ REPORT
STCI FINANCE LIMITED
(Formerly known as Securities Trading Corporation of India Limited)
14
5. SUBSIDIARY COMPANIES & THEIR PERFORMANCE
Your Company has the following subsidiaries:
STCI Primary Dealer Ltd (wholly owned subsidiary) STCI Commodities Ltd (wholly owned subsidiary)
In terms of the provisions of Section 129(3) of the Companies Act, 2013, the Consolidated Financial Statements of the Company and its subsidiaries, STCI Primary Dealer Ltd and STCI Commodities Ltd for the year ended 31st March 2015 are prepared and the same along with the Auditors’ Report form part of this Annual Report.
Pursuant to the first proviso of Section 129(3) of the Companies Act read with Rule 5 of the Companies (Accounts) rules 2014, a separate statement containing the salient features of the financial statement of its subsidiaries in the prescribed form AOC -I are annexed to the Company’s audited financial statement for the year ended March 31, 2015. However, brief comments on their performance during the year are being given so as to present a consolidated position of the operations of STCI Group to the shareholders.
(i) STCI Primary Dealer Limited
STCI Primary Dealer Limited, your Company’s subsidiary engaged in Primary Dealership business, reported a profit after tax of `80.67 crore for the financial year ended March 31, 2015 as against a profit after tax of ` 58.02 crore during the previous financial year. The improved working results are primarily on account of higher trading income on fixed income securities.
The Audited financial statements along with the Auditors’ Report and the Directors Report thereon of STCI Primary Dealer Limited for the financial year ended March 31, 2015 form part of this Annual Report.
(ii) STCI Commodities Limited
STCI Commodities Limited, your Company’s subsidiary has been liquidating its assets, settling its pending legal cases and surrendering its Multi Commodity Exchange (MCX) and National Commodity and Derivative Exchange (NCDEX) licence, since discontinuance of its commodity broking operations in September 2011. As a result, the Company reported a profit after tax of ` 0.07 crore for the financial year ended March 31, 2015 as against ̀ 0.02 crore during the previous year.
The Audited financial statements along with the Auditors’ Report and the Directors Report thereon of STCI Commodities Limited for the financial year ended March 31, 2015 form part of this Annual Report.
During the course of review of consolidated financial statements of the Company for FY 2014-15, The Comptroller and Auditor General of India (C&AG) advised that the Statutory Auditors of our subsidiaries, STCI Primary Dealer Limited & STCI Commodities Limited were required to be appointed by C&AG in terms of Section 139(5) of the Companies Act, 2013. The appointment of
DIRECTORS’ REPORT
STCI FINANCE LIMITED
(Formerly known as Securities Trading Corporation of India Limited)
15
Statutory Auditors of the subsidiary companies, STCI Primary Dealer Ltd and STCI Commodities Limited for the financial year 2014-15 was made under Section 139(1) of the Companies Act, 2013 by its members based on the understanding that Section 139(5) of the new Companies Act, 2013 on C&AG audit was not applicable to the subsidiaries since STCI Finance Limited is not directly controlled either by Central Government or State Government. However, for the financial year 2015-16, the Statutory Auditors of the subsidiary companies, STCI Primary Dealer Limited and STCI Commodities Limited have been appointed by C&AG.
6. DIRECTORS AND KEY MANAGERIAL PERSONNEL
(i) Changes in the Board of Directors
l Re-constitution of the Board
During the financial year 2014-15, the Company re-constituted the Board of Directors of the Company as per the requirements of the Companies Act, 2013 (the Act) and the rules made there under. The shareholders at the 20th Annual General Meeting (AGM) held on 11th September, 2014, on the recommendation of the Board, appointed the existing Directors, Mr. Jayant Sinha, Mr. K.Narasimha Murthy and Mr. S.Ravi as Independent Directors of the Company, not liable to retire by rotation, for a term of three consecutive years commencing from September 11, 2014 upto the 23rd Annual General Meeting in calendar year 2017 pursuant to the provisions of the Act. Further, the shareholders at the 20th AGM held on September 11, 2014, on the recommendation of the Board, consented to categorise the appointment of Non-Independent Directors, Mrs. V.R Iyer ( Chairperson) and Mr. S.Venkateswarlu ( Managing Director) under ‘Directors liable to retire by rotation’ pursuant to the provisions of Section 152(6) of the Act.
l Resignations & Retirements
Mr. Jayant Sinha resigned as an Independent Director of the Company with effect from November 11, 2014 pursuant to his assuming charge as Minister of State in the Union Council of Ministers. The Board placed on record their high appreciation for the valuable services tendered by him during his tenure as Independent Director of the Company.
Mr. S.Venkateswarlu resigned as Managing Director of the company on completion his tenure on the close of business of April 30, 2015. He had long experience in the banking and finance field and the Company was benefited by his active role. The Board placed on record appreciation for significant contributions made by Mr. S.Venkateswarlu as Managing Director of the Company during its growing phase as a Loan NBFC.
Smt. V.R Iyer resigned as Chairperson of the Company with effect from June 01, 2015 consequent to her relinquishing office as Chairperson and Managing Director of Bank of India on her attaining superannuation. The Board placed on record their high appreciation for the valuable services rendered by her as Chairperson of the Company and for her significant contributions at the Board Meetings.
DIRECTORS’ REPORT
STCI FINANCE LIMITED
(Formerly known as Securities Trading Corporation of India Limited)
16
l Appointments
The Board of Directors, upon the recommendation of the Nomination, Remuneration & HRD Committee, appointed Mr. T.V Rao (DIN 05273533) as a Director of the Company w.e.f April 28, 2015 to fill in the casual vacancy in the category of Independent Director caused by the resignation of Mr. Jayant Sinha. In terms of Section 161 (4) of the Companies Act 2013 (the Act) read with Article 102 of the Company’s Articles of Association, he holds office upto the date the Director in whose place he is appointed to fill in the casual vacancy would have held office had he not resigned. i.e upto the 23rd AGM held in calendar year 2017. The Company has received a declaration from Mr. T.V Rao to the effect that he meets the criteria of independence as provided under Section 149(6) of the Act. The Board recommends the appointment of Mr. T.V Rao as an Independent Director not liable to retire by rotation, for a term of two years upto the conclusion of 23rd AGM held in calendar year 2017, at the ensuing AGM pursuant to Section 149, 152 read with Schedule IV of the Act.
The Board of Directors, upon the recommendation of the Nomination, Remuneration & HRD Committee, appointed Mr. Yogesh Gaat (DIN 07189252), Chief Executive officer (CEO) of the Company, as an Additional Director w.e.f May 19, 2015 and as Managing Director & CEO of the Company from May 19, 2015 to May 18, 2018. In terms of Section 161 (1) of the Act read with Article 101 of the Company’s Article of Association he holds office as an Additional Director upto the date of the ensuing AGM and is eligible for appointment. The Board recommends the appointment of Mr. Yogesh Gaat as Director liable to retire by rotation at the ensuing AGM.
The Board of Directors, upon the recommendation of the Nomination, Remuneration & HRD Committee, appointed Mr. Ajeet Kumar(DIN 07198324), Asst. General Manager of Bank of India, as an Additional Director w.e.f May 29, 2015 and as Deputy Managing Director & CEO of the Company from May 29, 2015 to May 28, 2016. In terms of Section 161 (1) of the Act read with Article 101 of the Company’s Article of Association he holds office as an Additional Director upto the date of the ensuing AGM and is eligible for appointment. The Board recommends the appointment of Mr. Ajeet Kumar as a Director liable to retire by rotation at the ensuing AGM.
The Board of Directors, upon the recommendation of the Nomination, Remuneration & HRD Committee, appointed Mrs. Thankom T. Mathew (DIN 00025326) as an Additional Director in the category of Independent Director with effect from August 27, 2015. In terms of Section 161 (1) of the Act read with Article 101 of the Company’s Article of Association she holds office as an Additional Director upto the date of the ensuing AGM and is eligible for appointment. The Company has received a declaration from Mrs. Thankom T. Mathew to the effect that she meets the criteria of independence as provided under Section 149(6) of the Act. The Board recommends the appointment of Mrs. Thankom T. Mathew as an Independent Director not liable to retire by rotation, for a term of three years upto the conclusion of 24th AGM held in calendar year 2018, at the ensuing AGM pursuant to Section 149, 152 read with Schedule IV of the Act.
DIRECTORS’ REPORT
STCI FINANCE LIMITED
(Formerly known as Securities Trading Corporation of India Limited)
17
The Company has received notices in writing under Section 160 of the Act from a member along with the requisite deposit proposing the candidature of Mr. T.V Rao, Mr. Yogesh Gaat, Mr. Ajeet Kumar and Mrs. Thankom T. Mathew for the office of Director. The details of the proposal of appointment of Mr. T.V Rao , Mr. Yogesh Gaat, Mr. Ajeet Kumar and Mrs. Thankom T. Mathew and their brief profile are furnished in the explanatory statement annexed to the Notice of the Annual General Meeting.
l Re-appointment
Mr. T.C Venkat Subramanian retires by rotation at the ensuing Annual General Meeting and being eligible, offers himself for re-appointment. The Board of Directors recommends his re-appointment. His brief profile is given in the Explanatory Statement annexed to the Notice for the ensuing Annual General Meeting.
(ii) Changes in Key Managerial Personnel
During the year, the Board of Directors at its meeting held on August 02, 2014, designated the existing Officials, namely, Mr. S.Venkateswarlu, Managing Director, Ms. Suparna Sharma, Company Secretary and Mr. Kamlesh Rathi, Chief Financial Officer as Key Managerial Personnel (KMP) of the Company pursuant to the provisions of the Companies Act, 2013 (the Act) and the rules framed there under. Subsequently, the Board of Directors at its meeting held on November 12, 2014 appointed Mr. Yogesh Gaat as Chief Executive Officer (CEO), one of the Key Managerial Personnel of the Company, with effect from January 19, 2015 pursuant to the provisions of the Act.
On the completion of tenure of Mr. S.Venkateswarlu as Managing Director of the Company on the close of business of April 30, 2015, the Board of Directors at its meeting held on May 08, 2015, appointed Mr. Yogesh Gaat, existing CEO and one of the Key Managerial personnel of the Company, as Managing Director & CEO with effect from May 19, 2015 for a term of three years. Subsequently, the Board of Directors at its meeting held on May 25, 2015, appointed Mr. Ajeet Kumar, Asst. General Manager of Bank of India, as Deputy Managing Director, one of the Key Managerial Personnel of the Company, with effect from May 29, 2015 for a term of 1 year pursuant to the provisions of the Act.
In terms of Section 203 196, 197, 203 read with Schedule V of the Act, the requisite resolution in regard to the terms and conditions of (i) appointment of Mr. Yogesh Gaat as Managing Director & CEO and (ii) appointment of Mr. Ajeet Kumar as Deputy Managing Director are included in the Notice of the ensuing AGM for the approval of the members.
7. DECLARATION BY INDEPENDENT DIRECTORS
The Company has received declarations from all Independent Directors of the Company confirming that they meet with the criteria of independence as prescribed under sub-section (6) of Section 149 of the Companies Act, 2013.
DIRECTORS’ REPORT
STCI FINANCE LIMITED
(Formerly known as Securities Trading Corporation of India Limited)
18
8. BOARD OF DIRECTORS
Composition
The Board of Directors comprise of professionals with wide experience and skills in the field of Banking and Finance. As on the date of the Report, the Board comprises of seven Directors consisting of (i) five Non-Executive Directors out of which four are Independent viz. Mr. T.C Venkat Subramanian (Non-Executive), Mr. K.Narasimha Murthy (Independent), Mr. S. Ravi (Independent), Mr. T.V Rao (Independent) and Mrs. Thankom T. Mathew (Independent) and (ii) Two Executive Directors viz. Mr. Yogesh Gaat, Managing Director & CEO and Mr. Ajeet Kumar, Deputy Managing Director (nominee of Bank of India).
Meetings held during the financial year:
During the year 2014-15, five Meetings of the Board were held on April 26, 2014, August 02, 2014, November 12, 2014, March 03,2015 and March 31, 2015. The composition of the Board and attendance of Directors at the Board meetings held during the financial year under review are given below:
Name of Director Category Number of meetings attended /number of meetings held during the tenure of Director
Smt. V.R Iyer (DIN 05242960)
Non-Executive Chairperson(upto May 31, 2015)
5/5
Mr. T.C Venkat Subramanian(DIN00040526)
Non-Executive Director 5/5
Mr. Jayant Sinha (DIN 02192952)
Independent Director (upto November 10, 2014)
*2/2
Mr. K.Narasimha Murthy(DIN 00023046)
Independent Director 5/5
Mr. S.Ravi(DIN 00009790)
Independent Director 5/5
Mr. S.Venkateswarlu(DIN 06583519)
Managing Director (upto April 30, 2015)
5/5
*Ceased to be a Director w.e.f November 11, 2014
9. COMMITTEES OF THE BOARD
On the date of Report, your Company has the following five Board Level Committees. The composition, scope and functions of these Committees, the number of meetings held during the financial year 2014-15 and attendance at the Committee meetings have been detailed below:
(i) Audit Committee
(ii) Nomination, Remuneration & HRD Committee
(iii) CSR Committee
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(iv) Credit and Investment Committee
(v) Risk Management Committee.
(i) AUDIT COMMITTEE
Audit Committee has been constituted by the Board of Directors in line with requirements of Section 177 of the Companies Act, 2013 and the rules framed there under.
Composition
On the date of the Report, the Audit Committee of the Board comprises of three Non-Executive Directors with majority of independent Directors including the Chairman of the Committee. Mr. S.Ravi (Independent) is the Chairman of the Committee and other members of the Committee are Mr. T.C Venkat Subramanian (Non-Executive) and Mr. T.V Rao (Independent). All members of the Audit Committee have requisite financial and management expertise and have held or hold senior/ top positions in reputed Institutions.
Scope and Functions
Presently, the scope and functions of the Audit Committee are as per Section 177 of Companies Act, 2013 and in particular include the following:
• recommend appointment and terms of appointment of auditors;
• review and monitor auditor’s independence and performance and effectiveness of audit process,
• approval or any subsequent modification of transactions with related parties,
• scrutiny of inter-corporate loans and investment
• Overseeing financial reporting processes
• valuation of undertaking or assets of the Company,
• oversee the functioning of vigil mechanism established under the Act for directors and employees and take suitable action where required.
• Reviewing periodic financial results, financial statements and evaluating the adequacy of internal financial control systems
• Reviewing the annual financial statements with the Management and Statutory Auditors and recommending consideration thereof to the Board of Directors
• Discussing and reviewing periodically the Internal and Concurrent Aud it Reports and the scope and adequacy of the Internal Audit function.
• Reviewing the Audit/Inspection reports of the Comptroller & Auditor General of India, Reserve Bank of India etc
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In addition to the above, the review of risk matters of the Company were entrusted to the Audit Committee upto July 22, 2015. However, on constitution of a separate Risk Management Committee by the Board of Directors with effect from July 23, 2015, the review of risk matters of the Company has been delegated to the Risk Management Committee of the board.
Meetings held during the financial year
During the financial year ending March 31, 2015, four Audit Committee meetings were held on April 26, 2014, August 02, 2014, November 12, 2014 and March 03, 2015. The composition of the Audit Committee and attendance of the members at the Committee meetings held during the financial year 2014-15 are given below:
Name of Director Category Number of meetings attended /number of meetings held during the tenure of Director
Smt. V.R Iyer Non-Executive Chairperson(Chairperson of Committee)
4/4
Mr. T.C Venkat Subramanian Non-Executive Director *4/4
Mr. Jayant Sinha Independent Director **2/2
Mr. K.Narasimha Murthy Independent Director 4/4
Mr. S.Ravi Independent Director ***Nil
* Ceased to be a member w.e.f March 31, 2015**Ceased to be a member w.e.f November 11, 2014*** appointed as member w.e.f March 31, 2015
(ii) NOMINATION, REMUNERATION & HRD COMMITTEE
The Nomination, Remuneration & HRD Committee has been constituted by the Board to perform the role and functions of the Nomination & Remuneration Committee stipulated under section 178 of the Companies Act 2013 and also to review the Human Resources policy and procedure followed by the Company.
Composition:
Presently, the Nomination, Remuneration & HRD Committee comprises of four Directors consisting of one Executive Director and three Non-Executive Directors out of which two Directors including the Chairman of the Committee are Independent. Mr. S.Ravi (Independent) is the Chairman of the Committee and the other members are Mr. T.C Venkat Subramanian (Non-Executive), Mr. K.Narasimha Murthy, (Independent) and Mr. Yogesh Gaat (MD & CEO).
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Scope and Functions
The scope and functions of the Nomination, Remuneration & HRD Committee in particular include the following:
• Formulate the criteria for determining qualifications, positive attributes and independence of a director and Identify persons who are qualified to become directors and who may be appointed in senior management in accordance with the criteria laid down, recommend to the Board their appointment and removal and shall carry out evaluation of every director’s performance.
• Recommend to the Board a policy relating to the remuneration for the directors, key managerial personnel and other employees.
• Ensure that in the remuneration policy (i) the level and composition of remuneration is reasonable and sufficient to attract, retain and motivate directors of quality to run the company successfully, (ii) relationship of remuneration to performance is clear (iii) remuneration to directors, KMPs and senior management involves a balance between fixed and incentive pay reflecting the performance objectives appropriate to the working of the Company and goals.
• review the Human Resources policy and procedure to be followed by the Company besides the remuneration to be paid to the Managing Director
Meetings held during the financial year
During the financial year 2014-15, four Meetings of the Nomination, Remuneration & HRD Committee were held on April 26, 2014, August 02, 2014, November 12, 2014 and March 03, 2015. The composition of the Nomination, Remuneration & HRD Committee and attendance of the members at the Committee meetings held during the financial year 2014-15 are given below:
Name of Director Category Number of meetings attended /number of meetings held during the tenure of Director
Mr. T.C Venkat Subramanian Non-Executive Director(Chairman of the Committee upto 30.03.2015)
4/4
Mr. S.Ravi Independent Director(Chairman of the Committee w.e.f 31.03.2015)
3/3
Mr. Jayant Sinha Independent Director *2/2
Mr. K.Narasimha Murthy Independent Director **Nil
Mr. S. Venkateswarlu Managing Director 4/4
*Ceased to be a member w.e.f November 11, 2014
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** Appointed as a member w.e.f. March 31, 2015
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(iii) CSR Committee
The CSR Committee of the Board has been constituted by the Board of Directors of the Company as per the requirements of Section 135 of the Companies Act, 2013 to perform the scope and functions stipulated under the Act and the rules made thereunder :
On the date of the Report, the CSR Committee comprises of four Directors out of which two Directors including the Chairman of the Committee are Independent. Mr. T.V Rao, (Independent) is the Chairman of the Committee and the other members are Mr. K.Narasimha Murthy (Independent), Mr. Ajeet Kumar (Deputy MD) and Mr. Yogesh Gaat (MD & CEO).
Scope and Functions
The scope and functions of the CSR Committee are as per Section 135 of Companies Act, 2013 and in particular include –
• Formulate and recommend to the Board, a CSR policy indicating the activity or activities to be undertaken by the company as specified in Schedule VII of the Act.
• Recommend the amount to be spent on these activities; and monitor the company’s CSR policy periodically.
• Institute transparent monitoring mechanism for the implementation of CSR projects
Meetings held during the financial year
During the financial year 2014-15, one Meeting of the CSR Committee of the Board was held on March 03, 2015. The composition of the CSR Committee and attendance of the members at the Committee meetings held during the financial year 2014-15 are given below:
Name of Director Category Number of meetings attended /number of meetings held in the tenure of Director
Mr. Jayant Sinha Independent Director(Chairman of the Committee upto 10.11.2014)
*Nil
Mr. K.Narasimha Murthy Independent Director(Chairman of the Committee w.e.f 31.03.2015)
1/1
Mr. T.C Venkat Subramanian Non-Executive Director **Nil
Mr. S. Venkateswarlu Managing Director 1/1
*Ceased to be a member w.e.f November 11, 2014** Inducted as a member w.e.f March 31, 2015. He was a member upto July 22, 2015
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(iv) CREDIT AND INVESTMENT COMMITTEE (CIC)
Composition
The Credit and Investment Committee of the Board presently comprises of four Directors consisting of one Executive Director and three Non-Executive Directors including the Chairman of the Committee out of which two are Independent. Mr. T. C. Venkat Subramanian is the Chairman of the Committee (Non-Executive) and the other members are Mr. K. Narasimha Murthy (Independent), Mr. T.V Rao (independent) and Mr. Yogesh Gaat (MD & CEO).
Scope and Functions
The Committee considers and approves loan and investment proposals beyond the delegated authority of the Committee of Executives, subject to limits laid down by the Board for exposures to a single borrower and a borrower group. The Committee also examines/vets matters relating to credit and investments viz. policies, concept papers, delegation of powers etc and recommend these to the Board for approval.
Meetings during the financial year
During the financial year 2014-15, five meetings of Credit and Investment Committee were held on August 03, 2014, September 06, 2014, November 19, 2014, December 26, 2014 and March 23, 2015. The composition of the Committee and attendance of the members at the Committee meetings held during the financial year 2014-15 are given below :
Name of Director Category Number of meetings attended /number of meetings held during the tenure of Directors
Mr. T.C Venkat Subramanian Non-Executive Director(Chairman of the Committee)
5/5
Mr. Jayant Sinha Independent Director *2/2
Mr. K.Narasimha Murthy Independent Director 5/5
Mr. S. Venkateswarlu Managing Director (upto April 30, 2015)
5/5
*Ceased to be a member w.e.f November 11, 2014
(v) Risk Management Committee of the Board (w.e.f July 23, 2015)
The Risk Management Committee was constituted by the Board at its meeting held on July 23, 2015 in line with the RBI corporate governance guidelines on constitution of a separate risk management committee for non–deposit taking systemically important NBFCs.
Composition
On the date of the Report, the Risk Management Committee comprises of three Directors out of
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which two Directors including the Chairman of the Committee are Independent. Mr. K.Narasimha Murthy (Independent) is the Chairman of the Committee and the other members are Mr. T.V Rao (Independent) and Mr. Ajeet Kumar (Deputy MD)
Scope and Functions
The scope and functions of the Risk Management Committee in particular include as follows:
• Approve and review the Risk management framework, policies governing various risks and the reporting mechanism.
• Approve and review the various limits and parameters for trading and investment, stop loss policies viz. setting up of trading and investment limits for the Company’s officials, counterparty exposure limits, instrument wise exposure limits etc.
• Review of ALM and reports that are submitted to the Committee from time to time under RBI NBFC Directions.
• Monitoring of compliance with the approved risk policies, prudential limits, procedures, parameters etc and
• Any other risk/ALCO related matter that the Committee may consider relevant and appropriate
• Any other matter that may be delegated by the Board from time to time.
10. MANAGEMENT AND EXECUTIVE COMMITTEES
The Board of Directors have constituted the following Committees of Senior Executives to manage its business and the related risks. These Committees meet regularly to deliberate on matters which have a bearing on the Company’s operations and functions as a forum to elicit inputs from departmental heads and also keeps departmental heads aware of these issues.
(i) ALCO & Risk Management Committee
ALCO and Risk Management Committee is responsible for (i) ensuring adherence to the prudential limits and guidelines set by the Board of Directors and the Audit Committee / Risk Management Committee of the Board (ii) formulating Risk Management Policies under the supervision of Audit Committee/Risk Management Committee of the Board and (iii) attending to all issues related to Asset-Liability Management. It comprises of senior executives and is headed by the Managing Director.
(ii) Credit Committee of Executives (CCE)
The Credit Committee considers and sanctions loan within the powers delegated to it by the Board. The Credit Committee comprises of the Managing Director & CEO, Deputy Managing Director, DGM (Credit), DGM (Risk) and AGM (credit).
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(iii) Investment Committee
Investment Committee takes investment / divestment decisions and manages and supervises the long term investment portfolio in accordance with the prudential limits and long term investment guidelines approved by the Board. The Committee comprises of senior executives and is headed by the Managing Director.
(iv) CSR Committee of Executives
The CSR Committee of Executives implements and monitors the CSR activities of the Company within the Policy Framework under the overall supervision of the CSR Committee of the Board. The Committee comprises of Managing Director and three senior executives nominated by the Managing Director.
(v) Grievances Redressal Committee
The Grievances Redressal Committee reviews the complaints and grievances of staff and that of Customers/clients. The Committee comprises of the Managing Director and two senior executives as may be appointed by the Managing Director under his delegated powers.
11. EXTRACT OF ANNUAL RETURN
The extract of annual return in the prescribed form MGT-9 as provided under section 92(3) of of the Companies Act, 2013 is annexed to this Report as Annexure I.
12. COMPANY’S POLICY ON DIRECTORS’ APPOINTMENT AND REMUNERATION FOR DIRECTORS/KEY MANAGERIAL PERSONNEL/ SENIOR MANAGEMENT PERSONNEL/OTHER EMPLOYEES
Pursuant to Section 178 of the Companies Act, 2013 read with the rules framed there under and the applicable RBI Guidelines on corporate governance for NBFCs, the Board Directors, upon the recommendation of the Nomination, Remuneration & HRD Committtee, have approved the policy on Directors’ Appointment and Remuneration for Directors/ Key Managerial Personnel /Senior Management Personnel / other employees. The said policy has been annexed to this Report as Annexure II.
13. PERFORMANCE EVALUATION OF THE BOARD, COMMITTEES AND DIRECTORS
Pursuant to the provisions of the Companies Act 2013, the Board of Directors carried out annual evaluation of its own performance, the individual Directors and the working of all Committees of the Board based on the evaluation policy approved by the Board of Directors on the recommendation of the Nomination, Remuneration & HRD Committee. The said policy lays down the evaluation process and the broad criteria/ parameters for evaluation of performance of the Board of Directors as a whole, its Board Committees and the Directors based on the duties and functions stipulated under the Act. Separate feedback forms were prepared and circulated for evaluation of the Board of Directors, the Non-Independent Directors, the Independent Directors and the various Board Committees based on the broad criteria/ parameters laid down in the policy. As per the laid down evaluation process, the Independent Directors at their separate meeting held during the year rated and discussed their feedback on the evaluation of the Non-Independent Directors and the Board as whole including the
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quality, quantity and timeliness of flow of information to the Board. On the same lines, the Board of Directors rated and discussed their feedback on the evaluation of the Independent Directors as well as the Committees of the Board. While carrying out the performance evaluation, the Board of Directors considered and discussed the feedback of the Independent Directors on evaluation of Board as a whole and the Non-Independent Directors.
14. PARTICULARS OF RELATED PARTY TRANSACTIONS
All transactions entered into with the related parties referred to under section 188(1) of the Companies Act, 2013 during the year, were in the ordinary course of business and on arms length basis. There are no materially significant related party transactions made by the Company with the Directors or Key Managerial Personnel or other related parties that may have a potential conflict with the interest of the Company at large. All transactions with related parties under the Act are placed before the Audit Committee and the Board periodically. As required by RBI Circular dated November 10, 2014 on the Revised Regulatory Framework for NBFCs, the Board of Directors based on the recommendation of the Audit Committee, have approved the Policy on related party transactions based on the provisions of the Companies Act, 2013 and the rules framed there under. The said policy on Related Party Transactions is annexed to this Report as Annexure III. The particulars of contracts or arrangements entered into with related parties referred to under Section 188(1) in Form AOC-1 is annexed to this Report as Annexure IV.
15. PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS UNDER SECTION 186
Pursuant to Section 186(11) of the Companies Act, 2013 (the Act), loans made, guarantees given or securities provided in the ordinary course of its business by a company engaged in the business of financing of companies or any acquisition of securities made by an NBFC whose principal business is acquisition of securities are exempt from the provisions of section 186 of the Act. Therefore, disclosure relating to loans, guarantees and investments made by the Company are not applicable.
16. CORPORATE SOCIAL RESPONSIBILITY (CSR)
Your Company has been selectively contributing to the society through its CSR initiatives in the form of financial support to the underprivileged, development of rural/ underprivileged areas, promotion of education, making available free or affordable Medical facilities etc. During the year under review, the Board of Directors constituted the CSR Committee of the Board to perform the scope and functions stipulated under Section 135 of the Companies Act, 2013 (the Act) read with the rules framed there under. Pursuant to the recommendation of the CSR Committee, the Board of Directors adopted a detailed policy on Corporate Social Responsibility based on the provisions of the Act, specifying the CSR activities/ projects/programs to be undertaken by Company, the modalities of execution, implementation and monitoring process for the same. The brief outline of the CSR Policy, the CSR activities undertaken by the Company and the amount spent on the CSR activities during the financial year 2014-15 is given as a part of Annual Report on CSR activities in the format prescribed under the Companies (Corporate Social Responsibility Policy) Rules, 2014, annexed to this Report as Annexure V.
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17. VIGIL MECHANISM
Pursuant to the provisions of Section 177(9) of the Companies Act, 2013 and the rules framed there under, the Company has established a vigil mechanism / Whistle Blower Policy to enable directors and employees report genuine concerns or grievances about unethical or improper behaviour, actual or suspected fraud or breach of the Company’s code of conduct or company’s policies and procedures, law or regulation. The vigil mechanism provides for adequate safeguards against victimisation of directors and employees who use such mechanism and make provision for direct access to the Chairperson of the Audit Committee, in appropriate or exceptional cases. The Audit Committee oversees the vigil mechanism. The details of the vigil mechanism/ Whistle Blower Policy have been disclosed on the website of the Company www.stcionline.com
18. DISCLOSURE OF REMUNERATION AND OTHER RELATED DISCLOSURES
In terms of Section 197(12) of the Companies Act, 2013 (the Act) read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the ratio of the remuneration of each director to the median employees’ remuneration and such other details as prescribed is annexed to this Report as Annexure VI (a).
The statement containing particulars of employees as required under Section 197(12) of the Companies Act, 2013 read with rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is annexed to this Report as Annexure VI (b).
19. AUDITORS
Statutory Auditors
M/s AJ Shah & Co, Chartered Accountants, Mumbai were appointed as the Statutory Auditors of the Company by the Comptroller & Auditor General of India (C&AG) for the year ended March 31, 2015. The Comptroller & Auditor General of India (C&AG) has re-appointed M/s AJ Shah & Co, Chartered Accountants, Mumbai as the Statutory Auditors of the Company for the financial year 2015-16.
The Auditors’ Report of the Company for the year under review does not contain any qualification, reservation or adverse remark.
Secretarial Auditors
Pursuant to the provisions of Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Board of Directors of the Company appointed M/s Nilesh Shah & Associates, a firm of Company Secretaries in Practice to undertake the Secretarial Audit of the Company for FY2014-15. In accordance with the provisions of sub-section (1) of section 204, the Secretarial Audit Report for the Financial Year 2014-15 is appended to this Report as Annexure VII.
The Secretarial Audit Report does not contain any qualification, reservation or adverse remark.
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Internal Auditors
M/s Borkar & Muzumdar, Chartered Accountants, Mumbai were appointed as the Company’s Internal Auditors for the financial year 2014-15.
20. INSTANCES OF FRAUD, IF ANY REPORTED BY THE AUDITORS
There have been no instances of fraud reported by the Auditors under Section 143(12) of the Companies Act, 2013.
21. PARTICULARS REGARDING CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION & FOREIGN EXCHANGE EARNINGS AND OUTGO
The particulars regarding Conservation of Energy and Technology Absorption as required by the Companies (Accounts) Rules, 2014 are not applicable as the Company does not carry out any manufacturing activity . There were no earnings and outgo of foreign exchange during the year under review. Your Company uses Information Technology extensively in its day to day operations.
22. PUBLIC DEPOSITS
During the year the financial year 2014-15, your Company has not accepted any deposits from the public within the meaning of the provisions of the Non-Banking Financial Companies Acceptance of Public Deposits (Reserve Bank) Directions, 1998 or under Chapter V of the Companies Act, 2013.
23. FAIR PRACTICES CODE
Your Company has adopted the fair practices code on the model provided by RBI and this is available on the Company’s website. Fair practice code provides information to the customers and explains how the Company is expected to deal with customers on a day to day basis.
24. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS IMPACTING THE GOING CONCERN STATUS OF THECOMPANY
There are no significant and/or material orders passed by the Regulators or Courts or Tribunals impacting the going concern status of the Company.
25. DISCLOSURE UNDER SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION & REDRESSAL), ACT, 2013
The Company has in place an appropriate Policy for prevention of Sexual Harassment of Women at Workplace. During the period under review, no complaints have been reported under the Prevention of Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.
26. DIRECTORS’ RESPONSIBILITY STATEMENT
Pursuant to the requirements of Section 134 (5) of the Companies Act, 2013, with respect to Directors’ Responsibility Statement, the Directors hereby confirm that:
(i) in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures;
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(ii) the Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company at the end of the financial year and of the profit and loss of the company for that period;
(iii) the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities;
(iv) the Directors have prepared the annual accounts on a going concern basis;
(v) the Directors have laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and were operating effectively; and
(vi) the Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.
27. ANNEXURES FORMING PART OF THIS REPORT OF DIRECTORS
The annexures referred to in this Report and the information required to be are annexed herewith and form a part of this Report of the Directors.
(i) Extracts of Annual Return in Form MGT-9- Annexure I.
(ii) Policy on Directors appointment and remuneration for Directors/ KMP/senior management personnel / other employees-Annexure II
(iii) Policy on Related party transactions- Annexure III
(iv) Related party transactions under Section 188(1) in Form AOC-1- Annexure IV
(v) Annual report on CSR activities- Annexure V
(vi) Ratio of remuneration to median employees remuneration as per Section 197 (12) of Companies Act, 2013 read with Rule 5(1) of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014-Annexure VI (a)
(vii) Details of employee remuneration as per Section 197 of the Companies Act, 2013 and Rule 5(2) & 5(3) of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014- Annexure VI (b)
(viii) Secretarial Audit Report for financial year 2014-15 - Annexure VII
28. CAUTIONARY STATEMENT
Statements in this Directors’ Report describing the Company’s objectives, projections, estimates, outlook, expectations or predictions may be “forward-looking statements”. Actual results could differ materially from those expressed or implied. Important factors that could make a difference to the Company’s operations include demand and pricing in the Company’s principal markets, changes
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in Government regulations, tax regimes, economic developments within India and other incidental factors.
29. ACKNOWLEDGEMENT
Your Directors would like to express their sincere appreciation of the co-operation and assistance received from shareholders, bankers, regulatory bodies and other business constituents during the year under review.
Your Directors also wish to place on record their appreciation for the commitment displayed by all the executives, officers and staff, in the performance of the Company during the year.
For and on behalf of the Board of Directors
August 27, 2015 Mumbai
Yogesh Gaat
Managing Director & CEO (DIN 07189252)
S.Ravi
Director (DIN 00009790)
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ANNEXURE I TO THE DIRECTORS REPORT
FORM NO. MGT-9 EXTRACT OF ANNUAL RETURN
as on the financial year ended on March 31, 2015 [Pursuant to section 92(3) of the Companies Act, 2013 and rule 12(1) of the Companies
(Management and Administration) Rules, 2014]
I. REGISTRATION AND OTHER DETAILS:
i) CIN U51900MH1994PLC078303
ii) Registration Date 10/05/1994
iii) Name of the Company STCI Finance Limited
iv) Category / Sub-Category of the Company Public Company limited by shares/NBFC
v) Address of the Registered office and contact details
A/B 1-802, A-Wing, 8TH Floor, Marathon Innova, Marathon Nextgen Compound, Off. Ganpatrao Kadam Marg, Lower Parel , Mumbai - 400 013.Tel: +91-22-6142 5115/100Fax: +91-22 24991092E-mail id: [email protected].
vi) Whether listed company Yes. The Company is a listed company within the meaning of Section 2(52) of the Companies Act, 2013 as the Non-Convertible Debentures of the Company issued on private placement basis are listed on the wholesale debt market segment of NSE.
vii) Name, Address and Contact details of Registrar and Transfer Agent, if any
Sharepro Services (India) Private Limited Address: 13 AB, Samhita Warehousing Complex, Sakinaka Telephone Exchange Lane, Sakinaka, Andheri (East), Mumbai - 400 072.Tel: +91-22- 67720329Fax: +91-22- 28508927 E-mail id:[email protected]
II. PRINCIPAL BUSINESS ACTIVITIES OF THE COMPANY
(All the business activities contributing 10 % or more of the total turnover of the company shall be stated)
Sr. No.
Name and Description of main products / services
NIC Code of the Product/service
% to total turnover of the company
1 Lending Activity 64920- Other credit granting 87.37 %
2 Investment Activity 64300-Trusts, Funds & other financial vehicles
10.66 %
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III. PARTICULARS OF HOLDING, SUBSIDIARY AND ASSOCIATE COMPANIES
Sr. No.
Name and Address of the Company
CIN / GLNHolding/
Subsidiary / Associate
% of Shares Held
Applicable Section
1 STCI Primary Dealer Limited U67110MH2006PLC165306 Subsidiary 100% 2(87)
2 STCI Commodities Limited U67120MH2004PLC148711 Subsidiary 100% 2(87)
IV. SHARE HOLDING PATTERN (Equity Share Capital Breakup as percentage of Total Equity)
i) Category-wise Share Holding
Category of Shareholders
No. of Shares held at the beginning of the year
No. of Shares held at the end of the year
% Change during
the yearDemat Physical Total % of
Total Shares
Demat Physical Total % of Total
SharesA. Promoters (1) Indian a) Individual/
HUF - - - - - - - - -
b) Central Govt. - - - - - - - - - c) State Govt.(s) - - - - - - - - - d) Bodies Corp. - - - - - - - - - e) Banks / FI - - - - - - - - - f) Any other - - - - - - - - -Sub-total (A) (1): - - - - - - - - -(2) Foreign
a) NRI’s- Individuals
- - - - - - - - -
b) Other-Individuals
- - - - - - - - -
c) Bodies Corp. - - - - - - - - -d) Banks / FI - - - - - - - - -e) Any Other - - - - - - - - -
Sub-total (A) (2): - - - - - - - - -Total Shareholding Promoter (A) = (A)(1) + (A)(2)
- - - - - - - - -
B. Public Shareholding1. Institutions a) Mutual Funds - - - - - - - - -
b) Banks / FI 34907662 - 34907662 91.86 34907662 - 34907662 91.86 - c) Central Govt. - - - - - - - - - d) State Govt. (s) - - - - - - - - -
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Category of Shareholders
No. of Shares held at the beginning of the year
No. of Shares held at the end of the year
% Change during
the yearDemat Physical Total % of
Total Shares
Demat Physical Total % of Total
Shares e) Venture
Capital Funds- - - - - - - - -
f) Insurance Companies
2516250 - 2516250 6.62 2516250 - 2516250 6.62 -
g) FIIs - - - - - - - - - h) Foreign
Venture Capital Funds
- - - - - - - - -
i) Others (specify)
576088 - 576088 1.52 576088 - 576088 1.52-
Sub-total (B)(1): 38000000 - 38000000 100 38000000 - 38000000 100 -2. Non-Institutions
a) Bodies Corp. - - - - - - - - - i) Indian - - - - - - - - - ii) Overseas - - - - - - - - - b ) Individuals - - - - - - - - -
i) Individual shareholders holding nominal share capital upto ` 1 lakh
- - - - - - - - -
ii) Individual shareholders holding nominal share capital in excess of `1 lac
- - - - - - - - -
c) Others (specify)
- - - - - - - - -
Sub-total (B)(2): 38000000 - 38000000 100 38000000 - 38000000 100 -
Total Public Shareholding(B) = (B)(1)+ (B)(2)
38000000 - 38000000 100 38000000 - 38000000 100 -
C. Shares held by Custodian for GDRs & ADRs
- - - - - - - - -
Grand Total (A+B+C) 38000000 - 38000000 100 38000000 - 38000000 100 -
STCI FINANCE LIMITED
(Formerly known as Securities Trading Corporation of India Limited)
34
ii) Shareholding of Promoter-
Sr. No.
Shareholder’s Name
Shareholding at the beginning of the year
Share holding at the end of the year
% change in share holding during
the year
No. of Shares
% of total Shares of the
company
%of Shares Pledged /
encumbered to total shares
No. of Shares
% of total Shares of the
company
%of Shares Pledged /
encumbered to total shares
1 - - - - - - - -2 - - - - - - - -3 - - - - - - - -4 - - - - - - - -
Total - - - - - - -
iii) Change in Promoters’ Shareholding (please specify, if there is no change)
Sr. No.
Particulars Shareholding at the beginningof the year
Cumulative Shareholding during the
YearNo. of shares
% of totalshares of the
company
No. of shares
% of totalshares of the
company1 At the beginning of the year - - - -2 Date wise Increase / Decrease in
Promoters Share holding during the year specifying the reasons:
- - - -
3 At the end of the year - - - -
iv) Shareholding Pattern of top ten Shareholders: (other than Directors, Promoters and Holders of GDRs and ADRs):
S. No
For Each of the Top 10 Shareholders
Shareholding at the beginning of the year
Cumulative Shareholding during the Year
No. of shares
% of totalshares of the
company
No. of shares
% of totalshares of the
company1. Bank of India
At the beginning of the year 11383781 29.96 11383781 29.96Date wise increase/ decrease in share-holding during the year along with reasons
No change during the year
At the end of the year 11383781 29.96 11383781 29.962 IDFC Limited
At the beginning of the year 3530136 9.29 3530136 9.29
STCI FINANCE LIMITED
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35
S. No
For Each of the Top 10 Shareholders
Shareholding at the beginning of the year
Cumulative Shareholding during the Year
No. of shares
% of totalshares of the
company
No. of shares
% of totalshares of the
companyDate wise increase/ decrease in share-holding during the year along with reasons
No change during the year
At the end of the year 3530136 9.29 3530136 9.293. State Bank of India
At the beginning of the year 2812415 7.40 2812415 7.40Date wise increase/ decrease in share-holding during the year along with reasons
No change during the year
At the end of the year 2812415 7.40 2812415 7.404. IDBI Bank Ltd
At the beginning of the year 2507610 6.60 2507610 6.60Date wise increase/ decrease in share-holding during the year along with reasons
No change during the year
At the end of the year 2507610 6.60 2507610 6.605. Punjab National bank
At the beginning of the year 1877564 4.94 1877564 4.94Date wise increase/ decrease in share-holding during the year along with reasons
No change during the year
At the end of the year 1877564 4.94 1877564 4.946. Life Insurance Corporation of India
At the beginning of the year1505400 3.96 1505400 3.96
Date wise increase/ decrease in share-holding during the year along with reasons
No change during the year
At the end of the year 1505400 3.96 1505400 3.967. Canara Bank
At the beginning of the year 1426298 3.75 1426298 3.75Date wise increase/ decrease in share-holding during the year along with reasons
No change during the year
At the end of the year 1426298 3.75 1426298 3.758. ICICI Bank Ltd
At the beginning of the year 1400528 3.69 1400528 3.69Date wise increase/ decrease in share-holding during the year along with reasons
No change during the year
At the end of the year 1400528 3.69 1400528 3.69
STCI FINANCE LIMITED
(Formerly known as Securities Trading Corporation of India Limited)
36
S. No
For Each of the Top 10 Shareholders
Shareholding at the beginning of the year
Cumulative Shareholding during the Year
No. of shares
% of totalshares of the
company
No. of shares
% of totalshares of the
company9. Bank of Baroda
At the beginning of the year 1253544 3.30 1253544 3.30Date wise increase/ decrease in share-holding during the year along with reasons
No change during the year
At the end of the year 1253544 3.30 1253544 3.3010 Central Bank of India
At the beginning of the year 1150100 3.03 1150100 3.03Date wise increase/ decrease in share-holding during the year along with reasons
No change during the year
At the end of the year 1150100 3.03 1150100 3.03
v) Shareholding of Directors and Key Managerial Personnel:
S. No. Form each of Directors and KMP
Shareholding at the beginningof the year
Cumulative Shareholding during the Year
No. of shares % of totalshares of the
company
No. of shares % of totalshares of the
company1 At the beginning of the year
None of the Directors and Key Managerial Personnel hold any shares in the Company.
Date wise increase/ decrease in share-holding during the year along with reasonsAt the end of the year
V) INDEBTEDNESS
Indebtedness of the Company including interest outstanding/accrued but not due for payment (` In Lakhs) Secured Loans
excluding depositsUnsecured
LoansDeposits Total
IndebtednessIndebtedness at the beginning of the financial year
i) Principal Amount 76550.00 181834.09 - 258384.09ii) Interest due but not paid - - - -iii) Interest accrued but not due 828.27 60.00 - 888.27Total (i+ii+iii) 77378.27 181894.09 - 259272.36
STCI FINANCE LIMITED
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Secured Loans excluding deposits
Unsecured Loans
Deposits Total Indebtedness
Change in Indebtedness during the financial yeari) Addition (issue of NCDs during the year) (Net)
50000.00 17800.00 - 67800.00
ii) Reduction (net) 11550.00 6006.39 - 17556.39Net Change 38450.00 11793.61 - 50243.61Indebtedness at the end of the financial yeari) Principal Amount 115000.00 193627.70 - 308627.70ii) Interest due but not paid - - - -iii) Interest accrued but not due 4381.40 61.05 - 4442.45Total (i+ii+iii) 119381.45 193688.70 - 313070.15
VI. REMUNERATION OF DIRECTORS AND KEY MANAGERIAL PERSONNEL
A. Remuneration to Managing Director, Whole-time Directors and/or Manager: (` In Lakhs)
Sr. No.
Particulars of Remuneration Name of MD/WTD/ Manager Total AmountShri S.Venkateswarlu, Managing Director
1 Gross salary(a) Salary as per provisions contained in section 17(1) of the Income-tax Act, 1961
72.82 72.82
(b) Value of perquisites u/s 17(2) Income-tax Act, 1961 11.68 11.68(c) Profits in lieu of salary under section 17(3) Income- tax Act, 1961
- -
2 Stock Option - -3 Sweat Equity
4Commission - as % of profit - others, specify…
- -
5 Others, please specify 3.75 3.75
Total (A) 88.25 88.25
*Ceiling as per the Act 896.94
* In terms of Section 197 and Schedule V of the Act, the remuneration payable to Managing Director shall not exceed 5% of the net profits of the Company.
STCI FINANCE LIMITED
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B. Remuneration to other directors
(` In Lakhs)
Sr. No. Particulars of Remuneration Name of Directors Total Amount
1 Independent Directors *Jayant Sinha S.Ravi K.Narasimha Murthy
(a) Fee for attending board /committee meetings
1.60 1.80 3.20 6.60
(b) Commission - - - (c) Others, please specify - - - Total (1) 1.60 1.80 3.20 6.60
2 Other Non-Executive Directors ** V.R Iyer T.C Venkat Subramanian
(a) Fee for attending board committee meetings 1.80 3.60 5.40(b) Commission - - (c) Others, please specify - -
Total (2) 1.80 3.60 5.40 Total (B)=(1+2) 12.00
Total Managerial Remuneration (A) + (B)
100.25
Overall Ceiling as per the Act-For (A) –Remuneration to MD
-For (B)- Remuneration to other Directors by way of sitting fees for attending each meeting of Board or Committee
896.94( 5% of net profits of the Company for MD)
60.00(` 1,00,000 for each director for each meeting of the Board or Committee thereof attended by him)
* Shri Jayant Sinha resigned as Independent Director of the Company w.e.f November 11, 2014.
** Sitting fees is remitted to the nominating institution, Bank of India.
STCI FINANCE LIMITED
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C. Remuneration to Key Managerial Personnel Other Than MD / Manager / WTD
Sr. No.
Particulars of Remuneration Key Managerial Personnel
CEO* CS CFO Total
1 Gross salary (a) Salary as per provisions contained in section 17(1) of the Income-tax Act, 1961
12.96 23.76 28.26 64.98
(b) Value of perquisites u/s 17(2) Income-tax Act, 1961
- 0.57 0 0.57
(c) Profits in lieu of salary under section 17(3) Income-tax Act, 1961
- - -
2 Stock Option - - - 3 Sweat Equity - - - 4 Commission - - -
- as % of profit - - - - Others, specify…… - - -
5 Others, please specify 0.86 0.80 0.99 2.65Total 13.82 25.13 29.25 68.20
*CEO of the Company was appointed with effect from January 19, 2015.
VII. PENALTIES / PUNISHMENT/ COMPOUNDING OF OFFENCES:
Type Section of the Companies Act
Brief Description
Details of Penalty / Punishment/
Compounding fees imposed
Authority [RD / NCLT/
COURT]
Appeal made, if any (give
Details)
A. COMPANYPenalty - - - - - Punishment - - - - - Compounding - - - - - B. DIRECTORSPenalty - - - - - Punishment - - - - - Compounding - - - - - C. OTHER OFFICERS IN DEFAULTPenalty - - - - - Punishment - - - - - Compounding - - - - -
For and on behalf of the Board of Directors August 27, 2015 Mumbai
Yogesh Gaat
Managing Director & CEO (DIN 07189252)
S.Ravi
Director (DIN 00009790)
STCI FINANCE LIMITED
(Formerly known as Securities Trading Corporation of India Limited)
40
ANNEXURE II TO THE DIRECTORS’ REPORT
COMPANY’S POLICY ON DIRECTORS’ APPOINTMENT AND REMUNERATION FOR DIRECTORS/KEY MANAGERIAL PERSONNEL/ SENIOR MANAGEMENT PERSONNEL/OTHER EMPLOYEES
I. Policy relating to the Appointment criteria & Qualifications for Directors
a) The Committee shall consider the ethical standards of integrity and probity, qualification, expertise, track record, skill sets and experience of the person for appointment as Director and accordingly recommend to the Board his / her appointment.
b) The person to be appointed as Director shall not be disqualified under the Companies Act, 2013 and rules made there under, RBI guidelines as applicable to NBFCs or any other enactment for the time being in force.
c) The ‘fit and proper’ criteria shall be ascertained for the proposed / existing directors at the time of their appointment/ re-appointment as per the applicable RBI guidelines for NBFCs or other enactment/ regulations in force based upon requisite declarations/ information obtained from the proposed/ existing Directors under the applicable RBI Guidelines or other applicable enactment/ regulations.
d) In case the person considered for appointment is an Independent Director, it should be ensured that he/she possess the qualifications stipulated for Independent Directors under the Companies Act 2013 and rules framed there under.
e) The appointment of a Director/Independent Director/ Managing Director/ Whole-time Director shall be subject to the provisions of the Companies Act, 2013 and the rules made there under or any other applicable enactment or regulations.
f) The Term / Tenure for Directors shall be subject to the provisions of the Companies Act, 2013 and rules made there under as amended from time to time or any other applicable enactment/Regulations.
g) Due to reasons for any disqualification mentioned in the Companies Act, 2013 and rules made there under or under any other applicable Act, rules and regulations, the Committee may recommend to the Board with reasons recorded in writing, removal of a Director subject to the provisions of the Companies Act, 2013 and other applicable Act, rules and regulations.
II. Policy relating to Remuneration of Directors, Key Managerial Personnel (KMP), Senior Management and other employees
i. General
While determining the Remuneration payable to the Directors, Key Managerial Personnel, Senior Management Personnel and other employees, the Committee shall be guided by the following set of principles and objectives more particularly described under Section 178 of the Companies Act, 2013 :
a) The level and composition of remuneration shall be reasonable and sufficient to attract, retain and motivate directors of the quality required to run the company successfully.
STCI FINANCE LIMITED
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41
b) The relationship of remuneration to performance should be clear and meet appropriate performance benchmarks.
c) The remuneration to directors, senior management Personnel and Key Managerial Personnel should also involve a balance between fixed and incentive pay reflecting short and long-term performance objectives appropriate to the working of the company and its goals:
In determining the remuneration, due consideration shall be given to such factors as the Committee deems appropriate including but not limited to the Individual persons duties & responsibilities, level of skill, knowledge, experience and performance, core performance requirements, market trend, cost of living, industry practice and the prevailing laws and Regulations.
ii. Remuneration structure
The remuneration to the Managing Director (MD), Key Managerial Personnel(KMP), Senior Management Personal and other employees shall comprise of fixed pay and performance linked variable pay (PLVP). PLVP is based on the Individual performance and Company’s performance as per the PLVP policy approved by the Board from time to time.
iii. Remuneration to Managing Director/Whole time Director
a) The remuneration to be paid to the Managing Director/ Whole Time Directors (WTD) shall be determined by the Committee in accordance with the percentage / slabs / conditions laid down under the provisions of the Companies Act, 2013 and the rules framed there under or any other enactment for the time being in force.
b) The remuneration of Managing Director/ Whole Time Director as determined by the Committee shall be recommended to the Board for approval. The remuneration shall also be subject to approval of the shareholders and where applicable, the Central Government approval as per the provisions of the Companies Act, 2013.
iv. Remuneration to the Non-Executive & Independent Directors
The Non-Executive and Independent Directors shall be paid sitting fees for attending Board/ Committee meetings apart from reimbursement of expenses incurred for attending the meetings. The amount of sitting fees payable to Non-Executive and Independent Directors shall be determined by the Board from time to time subject to ceiling/ limits as provided under Companies Act, 2013 read with the rules made there under, as amended from time to time.
v. Remuneration to Senior management Personnel, KMPs (other than MD, WTD) and other employees
The remuneration to Senior Management Personnel, KMPs (other than MD, WTD), and other employees will be determined based on the experience, expertise, qualification and skills as per the Company’s HR Policy Manual amended from time to time.
STCI FINANCE LIMITED
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42
vi. Increments
(a) Increments/ revision of remuneration of Managing Director/Whole time Director shall be subject to the conditions and the applicable provisions of the Companies Act, 2013.
(b) Annual Increments in the existing remuneration structure in relation to KMPs (Other than MD/WTD), senior management personnel and other employees of the Company as recommended by the Managing Director will be scrutinized by the Committee based on the performance ratings, market conditions and other relevant factors and recommended to the Board for approval.
For and on behalf of the Board of Directors
August 27, 2015 Mumbai
Yogesh Gaat
Managing Director & CEO (DIN 07189252)
S.Ravi
Director (DIN 00009790)
STCI FINANCE LIMITED
(Formerly known as Securities Trading Corporation of India Limited)
43
ANNEXURE III TO THE DIRECTORS’ REPORT
RELATED PARTY TRANSACTION POLICY OF THE COMPANY
1. Preamble
The Board of Directors (the “Board”) of STCI Finance Limited ( “the Company”), has adopted the following policy on Related Party Transactions as defined below based on the recommendation of the Audit Committee pursuant to the provisions of Companies Act, 2013 (the Act) and the rules framed there under, as amended from time to time. The Board on recommendation of the Audit Committee may review and amend this policy from time to time. This policy applies to the transactions between the Company and its related parties.
2. Purpose
This policy has been framed as required under ‘Revised Regulatory Framework for NBFC’ issued by Reserve Bank of India vide its circular no. RBI/2014-15/299 DNBS (PD) CC.No.002/03.10.001/2014-15 on November 10, 2014. The Company is required to disclose the policy on dealing with Related Party Transactions on its website and in the Annual Report, with effect from March 31, 2015.
The Policy intends to provide a framework to identify related parties, approve, monitor, regulate and report transactions between the Company and its Related Parties based on the provisions of the Companies Act, 2013 (the Act).
3. Definitions
(i) “Audit Committee or Committee” means Committee of Board of Directors of the Company constituted under provisions of the Act.
(ii) “Board” means Board of Directors of the Company
(iii) “Related Party Transaction” or “RPT” means the following transactions /contracts /arrangements with related parties as given under clause (a) to (g) subsection (1) of section 188 of the Act:
(i) sale, purchase or supply of any goods or materials;
(ii) selling or otherwise disposing of, or buying, property of any kind;
(iii) leasing of property of any kind;
(iv) availing or rendering of any services;
(v) appointment of any agent for purchase or sale of goods, materials, services or property etc.
(vi) such related party’s appointment to any office or place of profit in the Company, its subsidiary company or associate company; and
(vii) underwriting the subscription of any securities or derivatives thereof, of the Company.
(iv) “Material Related party Transactions” mean related party transaction / transactions to be entered into individually or which taken together with previous transactions during a financial
STCI FINANCE LIMITED
(Formerly known as Securities Trading Corporation of India Limited)
44
year, exceed the prescribed monetary limit given under Rule 15 of the Companies (Meetings of Board and its Powers) Rules, 2014:
(v) “Related Party” means related party under Section 2(76) of the Act as provided below:
(a) A director or his relative
(b) Key Managerial Personnel or his/ her relative
(c) A firm, in which a director, manager or his relative is a partner
(d) A private company in which a director or manager or his relatives is a member or director
(e) A public company in which a director or manager is a director and holds along with his relatives, more than 2% of its paid-up share capital
(f) A body corporate whose board, managing director or manager is accustomed to act in accordance with the advice, directions or instructions of a director or manager, except such advice is given in a professional capacity.
(g) Any person on whose advice, directions or instructions a director or manager is accustomed to act, except such advice is given in a professional capacity
(h) Any company which is:
- A Holding, Subsidiary or an Associate company of such company or
- A Subsidiary of a Holding company to which it is also a Subsidiary
(i) A Director, other than an Independent Director, or Key Managerial Personnel of the holding company or his relative with reference to a company, shall be deemed to be a Related Party.
(vi) “Relative” As provided under Section 2(77) of the Companies Act, 2013 and the rules there under, relative with reference to any person, means anyone who is related to another, if-
(i) they are members of a Hindu Undivided Family;
(ii) they are husband and wife; or
(iii) one person is related to the other person as-
(a) Father (including step-father)
(b) Mother (including step-mother)
(c) Son (including step-son)
(d) Son’s wife
(e) Daughter
(f) Daughter’s husband
(g) Brother (including step-brother)
STCI FINANCE LIMITED
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45
(h) Sister (including step-sister).
(vii) “Key Managerial Personnel” means key managerial personnel as defined under Section 2(51) of the Companies Act, 2013 and includes (i) Managing Director (ii) a whole time director (iii) Chief Executive Officer (iii) Company Secretary; and (iv) Chief Financial Officer and (iv) such other officer prescribed under the Act.
(viii) “Associate Company” - As per Section 2(6) of the companies Act, 2013, associate company in relation to a Company means a company in which that other company has a significant influence, but which is not a subsidiary company of the company having such influence and includes a joint venture company.
Explanation: For the purposes of this clause, “significant influence” means control of at least 20% of the total share capital, or of business decisions under an agreement.
(ix) “Arms length transactions” means transaction between two related parties that is conducted as if they were unrelated, so that there is no conflict of interest.
(x) “Ordinary Course of business” all transactions or activities that are necessary, normal and incidental to the business of the Company as permitted by the Object Clause in the Memorandum of Association of the Company or transactions that are considered while computing the business income / revenue / turnover of the Company as opposed to “income from other sources shall be deemed to be in the ordinary course of business. These may also be common practices and customs of commercial transactions.
(xi) “Office or place of profit” means any office or place of profit:
(i) is held by a director, if the director holding it receives from the company anything by way of remuneration, over and above the remuneration to which he is entitled as director, by way of salary, fee, commission, perquisites, any rent-free accommodation, or otherwise;
(ii) is held by an individual other than a director or by any firm, private company or other body corporate, if the individual, firm, private company or body corporate holding it receives from the company anything by way of remuneration, salary, fee, commission, perquisites, any rent-free accommodation, or otherwise.
(xii) “ Policy” means this Related Transaction Policy
4. Policy
All Transactions with related parties including any subsequent modifications thereto must be reported to the Audit Committee and approved or referred for approval by the Committee in pursuance of this policy as per the provisions of the Companies Act, 2013 as amended from time to time.
4.1 Identification of Related Parties:
Every director and key managerial personnel shall at the beginning of every financial year disclose to the Company Secretary (CS) their related parties under section 2(76) of the Act read with the rules framed there under, as amended from time to time and disclose any changes thereto during the financial year as immediately as practicable. Based on the disclosures, the list of related
STCI FINANCE LIMITED
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46
parties will be identified and updated from time to time.
4.2 Identification of related Party Transactions:
In case of any proposed transaction or arrangement with a Related Party, the concerned functional Department in the Company shall furnish to the CS function, relevant details of the proposed transaction which shall include the name of the related party; nature of relationship; nature of contract, duration and particulars of the contract/arrangement/transaction; reason for entering into the transaction, manner of determining price and other commercial terms, the draft contract/ agreement and other supporting documents. The Company shall based on the details of transaction determine whether the transaction does, in fact, constitute a Related Party Transaction requiring compliance with this policy.
4.3 Approvals/ process for related party transactions
(i) Audit Committee review / approval:
All related party transactions / arrangements or any modifications thereof, will be referred to the Audit Committee for review and approval with the details of related party, nature of transaction, reason for undertaking the transaction, particulars of the contract/ arrangement, pricing terms, whether on arms length and in the ordinary course of business and other relevant information. Any member of the Committee who has a potential interest in any reported Related Party Transaction shall abstain from discussion and voting on the approval of the Related Party Transaction. The Audit Committee, on the recommendation of the management, may approve the transactions with related parties in accordance with provisions of the Companies Act read with the Rules made there under (as amended from time to time).
(ii) Board Approval
Related Party Transactions as defined under Section 188 of the Act which are not in ordinary course of business and/or not on arms length basis or any subsequent modification thereto, shall be placed before the Board for its approval. Where any director is interested in any transaction or contract or arrangement with a Related Party, such director shall abstain himself from discussion and voting on the approval of the related party transaction. The Board may approve all Related Party Transactions which are not at arm’s length and / or which are not in the ordinary course of business in accordance with provisions of the Companies Act read with the Rules made there under (as amended from time to time).
In addition to the above, contracts/ arrangements/ transactions which are in the ordinary course of business and at arms length and do not require approval of the Board under Section 188 of the Act may also be referred by the Audit Committee to the Board for its review as a matter of abundant caution.
(iii) Approval of the Shareholders
The following Material Related party transactions which exceed the monetary limit prescribed under Rule 15 of the Companies (Meetings of Board and its Powers) Rules, 2014
STCI FINANCE LIMITED
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(given below) and which are either not on arms length and/ or are not in the ordinary course of business, shall on recommendation of the Board be placed before the shareholders for its prior approval in accordance with the provisions of the Act and the Related Parties shall abstain from voting on such resolutions:
S.No Prescribed Related Party Transaction Monetary limit1 Sale, purchase or supply of any goods or
materials directly or through appointment of agents
Exceeding ten percent of the annual turnover of the Company or ` 100 crore, whichever is lower
2. selling or otherwise disposing of, or buying, property of any kind directly or through appointment of agents
exceeding ten percent of net worth or `100 crore, of the Company whichever is lower
3. leasing of property of any kind exceeding ten percent of the net worth or exceeding ten percent of turnover or ` 100 crore of the Company, whichever is lower
4 Availing or rendering of any services directly or through appointment of agents
Exceeding ten percent of annual turnover or ` 50 crore of the Company, whichever is lower
5. Appointment to any office or place of profit in the company, its subsidiary company or associate company
Monthly remuneration exceeding two and half lakh rupees
6 Remuneration for underwriting the subscription of any securities or derivatives thereof of the company
Exceeding one percent of the net worth
Explanation:
Turnover or Net worth shall be computed based on the last Audited Balance Sheet of the Company.
(iv) Related party Transactions not requiring approval of Audit Committee/Board etc
Notwithstanding the foregoing, Related Party Transactions involving the providing of compensation to a director or Key Managerial Personnel in connection with his or her duties to the Company including salary, reimbursement of business and travel expenses, halting allowance, entertainment expenses etc incurred in the ordinary course of business, will not require the approval of the Audit Committee/Board/shareholders.
5. Related party Transactions not approved under this Policy
Where any contract or arrangement not in ordinary course of business and/or not on arms length basis is entered into by a director or any other employee without obtaining the approval of Board or approval of shareholders by a resolution in the general meeting under Section 188(1) of the Act, it shall
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be put up for ratification by the Board or by the shareholders at a meeting within three months from the date on which such contract or arrangement was entered into. In the event the Company becomes aware of a transaction with a Related Party that has not been approved within three months as stated above, the matter shall be reviewed by the Board. The Board shall consider all of the relevant facts and circumstances of such Transaction/ arrangement and evaluate all options available to the Company, including ratification by the Board or shareholders, revision or termination of such transaction/ arrangement and take any such action as it may deem appropriate.
6. Disclosures
The particulars of contracts or arrangement with Related Parties referred to in section 188 shall be disclosed in the Board’s report for the financial year commencing on or after April 1, 2014 in the prescribed Form and the said form shall be signed by the persons who have signed the Board’s report. The Company shall disclose this Policy on its website and also in its annual report.
7. Register of Contracts/Arrangements in which Directors are interested
The Company shall maintain a Register of Contracts with Related Parties in accordance with the requirements of Section 189 of the Act to record particulars of all contracts /arrangements to which Section 184(2) and Section 188 of the Act applies and place such register before the next meeting of the Board and obtain signatures of all Directors present at that meeting. The said register shall be authenticated by the Company Secretary or such other person as may be authorized by the Board and shall be preserved permanently. Such Register of Contracts shall be kept at the registered office of the Company or at such other place as the members of the Company may decide, and shall be open for inspection during business hours. A member of the Company is entitled to get the extracts of the said register, within 7 days of the date of the request and upon payment of such fees as may be specified in the Articles of Association of the Company.
8. Applicability
In the event of any provisions contained in this Policy are inconsistent with the provisions contained in Companies Act, 2013 or RBI regulations or Accounting Standards, etc. or any amendments thereto, (Regulatory Acts), the provisions contained in the Regulatory Acts will prevail.
9. Amendments to the Policy
The Board of Directors on its own and / or as per the recommendations of Audit Committee can amend this Policy, as and when deemed fit.
For and on behalf of the Board of Directors
August 27, 2015 Mumbai
Yogesh Gaat
Managing Director & CEO (DIN 07189252)
S.Ravi
Director (DIN 00009790)
STCI FINANCE LIMITED
(Formerly known as Securities Trading Corporation of India Limited)
49
ANNEXURE IV TO THE DIRECTORS’ REPORT
FORM NO. AOC.2
Form for disclosure of particulars of contracts/arrangements entered into by the company with related parties referred to in sub-section (1) of section 188 of the Companies Act, 2013 including certain arms
length transactions under third proviso thereto
(Pursuant to clause (h) of sub-section (3) of section 134 of the Act and Rule 8(2) of the Companies (Accounts) Rules, 2014)
1. Details of contracts or arrangements or transactions not at arm’s length basis- NIL
(a) Name(s) of the related party and nature of relationship - N.A
(b) Nature of contracts/arrangements/transactions - N.A
(c) Duration of the contracts/arrangements/transactions - N.A
(d) Salient terms of the contracts/arrangements/ transactions including the value, if any - N.A
(e) Justification for entering into such contracts or arrangements or transactions- N.A
(f) date(s) of approval by the Board- N.A
(g) Amount paid as advances, if any:- N.A
(h) Date on which the special resolution was passed in general meeting as required under first proviso to section 188-N.A
2. Details of *material contracts or arrangement or transactions at arm’s length basis:
All transactions entered into by the Company with related parties during the year ended March 31, 2015 are in ordinary course of business and at arms length basis. The details of *material contracts or arrangement or transactions at an aggregate level for the financial year ended March 31, 2015 are :
S.N Name(s) of the related party and nature of relationship
Nature of contract/
arrangement
Duration of contract/
arrangement/ transaction
Salient terms of the contract/arrangements/
transactions including value,
if any
Amount (in
`lakh)
Date of Board
approval, if any
Amount paid as
advances, if any
1. STCI Primary Dealer Ltd-Wholly owned subsidiary
Purchase of government securities
N.A Purchase of government securities at market price
5565.21 N.A -
2. STCI Primary Dealer Ltd-(STCI PD) Wholly owned subsidiary
Capital receipt from buy-back of shares of STCI PD
N.A Consideration received on Buy-Back of shares by STCI PD at book value.
3731.20 N.A -
STCI FINANCE LIMITED
(Formerly known as Securities Trading Corporation of India Limited)
50
S.N Name(s) of the related party and nature of relationship
Nature of contract/
arrangement
Duration of contract/
arrangement/ transaction
Salient terms of the contract/arrangements/
transactions including value,
if any
Amount (in
`lakh)
Date of Board
approval, if any
Amount paid as
advances, if any
3. STCI Primary Dealer Ltd-wholly owned subsidiary
Reimbursement made for electricity charges
Ongoing Reimbursement made for sharing of Electricity charges at Delhi Office, proportionate to the office space shared.
2.01 N.A -
4 STCI Primary Dealer Ltd-wholly owned subsidiary
Reimburse-ment of expenses received
Ongoing Reimbursement received for House Rent recovered from staff of STCI PD occupying the Company’s Residential quarters at Mumbai.
8.68 N.A -
5. STCI Primary Dealer Ltd-wholly owned subsidiary
Sitting fees received
N.A Sitting fees received for each meeting of the Board attended by its Nominee.
1.00 -N,A -
6. STCI Commodities Ltd- wholly owned subsidiary
Sitting fees received
N.A Sitting fees received for each meeting of Board attended by its Nominee.
0.40 - -
The contracts/transactions/ arrangements mentioned above at 1 & 2 are material related party transactions as per the Company’s Policy on Related Party Transactions. The above disclosure has been made as a matter of abundant precaution in absence of definition of material contract/ arrangement/ transaction under Section 188 of the Companies Act, 2013.
For and on behalf of the Board of Directors
August 27, 2015 Mumbai
Yogesh Gaat
Managing Director & CEO (DIN 07189252)
S.Ravi
Director (DIN 00009790)
STCI FINANCE LIMITED
(Formerly known as Securities Trading Corporation of India Limited)
51
ANNEXURE V TO THE DIRECTORS REPORT
ANNUAL REPORT ON CORPORATE SOCIAL RESPONSIBILITY (CSR) ACTIVITIES AS PRESCRIBED UNDER SECTION 135 OF THE COMPANIES ACT, 2013 AND COMPANIES (CORPORATE SOCIAL RESPONSIBILITY POLICY) RULES, 2014
1. A brief outline of the Company’s CSR policy, including overview of projects or programs proposed to be undertaken and a reference to the web-link to the CSR policy and projects or programs.
The Company had in place a CSR Policy based on the voluntary guidelines on CSR issued by Ministry of Corporate Affairs (MCA) in December, 2009, in pursuance of which it has been selectively contributing to the society through its CSR initiatives in the form of financial support to the underprivileged, promotion of education, making available free or affordable Medical facilities etc. During the financial year 2014-15, the CSR Policy of the Company was revised in line with the requirements of section 135 of the Companies Act 2013 (the Act) read with the Companies (Corporate Social Responsibility Policy) Rules 2014 to lay down the guidelines and mechanism for undertaking socially useful initiatives or programmes or projects for welfare & sustainable development of the community at large. The CSR Policy inter alia include the CSR activities/ projects/programs to be undertaken by the Company as specified in Schedule VII of the Act and the modalities of execution, implementation and monitoring process for the same. During the financial year 2014-15, the Company had spent 2% of its average net profits made during the immediately preceding three financial years towards CSR activities/ projects in pursuance of the its CSR Policy and in compliance with Section 135 of the Act and the rules framed there under.
The CSR Committee constituted by the Board recommends to the Board the CSR Policy, the amount of expenditure to be incurred each year on the CSR activities in pursuance of the Policy, monitors the CSR policy of the Company from time to time and institutes a monitoring mechanism for implementation of CSR projects or programs or activities undertaken by the Company. The CSR Committee of Executives (CSRCE) comprising of Managing Director and three senior executives nominated by the Managing Director implements and monitors the CSR activities of the Company within the Policy Framework under the overall supervision of the CSR Committee of the Board, reports to the CSR Committee the progress of the CSR activities/ programs from time to time and assists in achieving the objectives and purpose of CSR Policy.
`Weblink to the CSR Policy and projects or programs
http://www.stcionline.com/Page.aspx?Sel=16&Pid=2&expandable=0
2. The Composition of the CSR Committee:
The present composition of the CSR Committee is as follows:
(a) Shri T.V Rao, Chairman
(b) Shri K.Narasimha Murthy, member
STCI FINANCE LIMITED
(Formerly known as Securities Trading Corporation of India Limited)
52
(c) Shri Ajeet Kumar, member
(d) Shri Yogesh Gaat, member
3. Average net profit of the company for last three financial years:
The Average net profit of the Company is ` 10383 lakhs
4. Prescribed CSR Expenditure (two per cent of the amount as in item 3 above):
The prescribed CSR expenditure based on 2% of average net profits made during the last 3 financial years is ` 208 Lakh
5. Details of CSR spent during the financial year:
During FY 2014-15, STCI Finance Limited has spent a total sum of ` 208 lakhs towards the following CSR activities in pursuance of its CSR Policy and the provisions of section 135 of the Act and the Rules framed there under:
S.No Nature of Activity CSR partner Amount spent (in ` Lakhs)
1. Contribution to the Prime Minister's National Relief Fund for socio economic development and relief and welfare.
- 202.00
2. Eradicating poverty, promoting health care including preventive health care by contributing towards Project of Patient care for medical treatment of 10 deserving poor children suffering from Blood Cancer and 10 deserving poor woman suffering from Breast Cancer at Tata Memorial Hospital, Mumbai.
Vasantha Memorial Trust
5.00
3. Promoting education by contributing towards the Project of education, boarding and lodging expenses of 6 children belonging to the disadvantaged communities from Katkari –tribe and Gavali- Dhangar at Experimental Residential Learning Centre in the rural area of Kolkevadi in Ratnagiri District, Maharashtra
Shramik Sahyog Trust
1.00
Total 208.00
(a) Total amount to be spent for the financial year : ` 208 Lakhs;
(b) Amount unspent, if any: Nil
STCI FINANCE LIMITED
(Formerly known as Securities Trading Corporation of India Limited)
53
(c) Manner in which the amount spent during the financial year is detailed below.
(` In Lakhs)
(1) (2) (3) (4) (5) (6) (7) (8)S.N CSR project
or activity identified
SectorinwhichProjectis covered
Projects or programs(1) Local area or other(2) Specify the State and district where projects or programs was undertaken
Amount outlay (budget) project or programs wise(in ` Lakhs)
Amount spent on projects Sub – heads:1. Direct expenditure on projects or programs2. Overheads
Cumulative expenditure upto the reporting period
Amount spent Direct or throughimplementing agency*
1. Contribution to Prime Minister's National Relief Fund for socio economic development and relief and welfare
Relief & welfare Contribution to the Prime Minister's National Relief Fund for socio economic development and relief and welfare
202.00 202.00 202.00 Direct
2. Eradicating hunger, poverty and malnutrition, promoting health care including preventive health care
Promotinghealth care including preventive health care
Project of Patient Care for medical treatment of cancer patients at Tata Memorial Hospital,Mumbai, Maharashtra
5.00 5.00 5.00 Through -Vasantha Memorial Trust
3. Promoting education
Promoting education, among disadvantaged children
Project for education, boarding and lodging expenses for disadvantaged children at its Residential School in rural area of Kolkevadi in Ratnagiri District, Maharashtra
1.00 1.00 1.00 Through Shramik Sahyog Trust
Total 208.00 208.00 208.00 -
*Give details of implementing agency.
STCI FINANCE LIMITED
(Formerly known as Securities Trading Corporation of India Limited)
54
6. In case the Company has failed to spend the two per cent of the average net profit of the last three financial years or any part thereof, the company shall provide the reasons for not spending the amount in its Board report : Not applicable
7. A responsibility statement of the CSR Committee that the implementation and monitoring of CSR Policy, is in compliance with CSR objectives and Policy of the Company
We hereby state that the implementation and monitoring of CSR Policy, is in compliance with CSR objectives and Policy of the Company.
For and on behalf of the Board of Directors
August 27, 2015 Mumbai
Yogesh Gaat
Managing Director & CEO (DIN 07189252)
T. V. Rao
Chairman of CSR Committee (DIN 05273533)
STCI FINANCE LIMITED
(Formerly known as Securities Trading Corporation of India Limited)
55
ANNEXURE VI (a) TO THE DIRECTORS’ REPORT
DISCLOSURES PURSUANT TO SECTION 197(12) OF THE ACT READ WITH RULE 5(1) OF THE COMPANIES (APPOINTMENT AND REMUNERATION OF MANAGERIAL PERSONNEL) RULES, 2014.
i. The ratio of the remuneration of each director to the median remuneration of employees of the company for the financial year 2014-15.
The ratio of remuneration of Managing Director to the median remuneration of employees for the financial year 2014-15 is 7.32:1
ii. The percentage increase in remuneration of each director, Chief Financial Officer, Chief Executive Officer, Company Secretary or Manager, if any, in the financial year ended March 31, 2015:
The percentage increase in remuneration of Managing Director, Chief Executive Officer, Chief Financial Officer & Company Secretary in the financial year 2014-15 are as follows:
Name of Director/ KMPs Designation % increase in remuneration
*Mr. S.Venkateswarlu Managing Director *99.56**Mr. Yogesh Gaat Chief Executive Officer
(w.e.f 19.01.2015)**-
Mr. Kamlesh Rathi Chief Financial Officer 7.50Ms. Suparna Sharma Company Secretary 6.41
* Mr. S.Venkateswarlu joined the company w.e.f May 01, 2013.The percentage increase in remuneration is on account of payment of performance linked variable pay for FY 2013-14 in FY 2014-15.
** Details of Mr. Yogesh Gaat are not given as he joined the Company w.e.f January 19, 2015.
iii. The percentage increase in the median remuneration of employees in the financial year ended March 31, 2015:
Median Remuneration of employees is `12.06 lakhs and `10.03 lakhs for FY 14-15 & FY 13-14 respectively. The percentage increase in the median remuneration of employees in the financial year 2014-15 is 20.20%.
iv. The number of permanent employees on the rolls of company:
The number of employees on the permanent payrolls of the Company as on March 31, 2015 is 34.
v. The explanation on the relationship between average increase in remuneration and Company performance:
The average increase in remuneration of employees during the year was 12.37%.
The Profit after tax increased from ̀ 9143.92 Lakh in FY 2014 to ̀ 15375.98 Lakhs in FY 2015, an increase of about 68%.
STCI FINANCE LIMITED
(Formerly known as Securities Trading Corporation of India Limited)
56
The remuneration structure of employees comprises of a fixed pay component and a variable pay component. While recommending the annual increase in the fixed remuneration, the Nomination, Remuneration & HRD Committee considers such factors as deemed appropriate including but not limited to the individual performance rating, inflation and benchmarking with the relevant peer group in the market. The variable remuneration is an integral part of the total remuneration and is based on the overall performance of the Company and individual performance as per the Variable Pay Policy approved by the Board from time to time upon the recommendations of the Nomination, Remuneration & HRD Committee.
vi. Comparison of the remuneration of the Key Managerial Personnel against the performance of the company:
The aggregate remuneration paid to Key Managerial Personnel during FY 2014-15 was approximately 1.02 % of the Profit after tax.
vii. Average percentile increase already made in the salaries of employees other than the managerial personnel in the last financial year and its comparison with the percentile increase in the managerial remuneration and justification thereof and point out if there are any exceptional circumstances for increase in the managerial remuneration:
The average increase made in the salaries of employees other than the Key Managerial Personnel for FY2015 is around 12.72% while the average increase in the remuneration of the Key Managerial Personnel including MD is 37.82%. The increase in remuneration is in line with the factors mentioned above at v.
viii. Variations in the market capitalization of the Company, price earnings ratio as at the closing date of the current financial year and previous financial year and percentage increase over decrease in the market quotations of the shares of the Company in comparison to the rate at which the Company came out with the last public offer in case of listed companies, and in case of unlisted companies, the variations in the net worth of the company as at the close of the current financial year and previous financial year.
Since only debentures of the Company are listed on the National Stock Exchange of India Limited, variations in the Net worth of the Company is given below:
Particulars As on March 31, 2015 (`in Lakhs)
As on March 31, 2014 (`in Lakhs)
Variation
Net worth 100,776.68 89,786.23 12.24%
ix. Comparison of the each remuneration of the Key Managerial Personnel against the performance of the company
The comparison of remuneration of each KMP against the Profit after tax for FY 2014-15 is as under:
Key Managerial Personnel % of profit after tax for FY 2014-15Mr. S.Venkateswarlu 0.57Mr. Yogesh Gaat ( joined w.e.f 19.01.2015)
0.09
STCI FINANCE LIMITED
(Formerly known as Securities Trading Corporation of India Limited)
57
Mr. Kamlesh Rathi, 0.19Ms. Suparna Sharma 0.16
x. The key parameters for any variable component of remuneration availed by the directors:
The variable pay component is an integral part of the remuneration availed which is based on the performance parameters as set out in the Variable pay policy approved by the Board from time to time on the recommendations of the Nomination, Remuneration & HRD Committee.
xi. The ratio of the remuneration of the highest paid director to that of the employees who are not directors but receive remuneration in excess of the highest paid director during the year:
Not applicable
xii. Affirmation that the remuneration is as per the remuneration policy of the company
Yes
Notes:
1. The Non-Executive Directors including Independent Directors are only entitled to payment of sitting fees of ` 20,000/- per meeting for each meeting of the Board or Committee thereof attended by them. The details of sitting fees received by Non-Executive Directors are provided in the Extract of Annual Return in Form MGT-09 annexed to this Directors report. The Non-Executive Directors are, therefore, not considered for the purpose of( i) & (ii) above i.e Ratio of remuneration of director to the median remuneration of employees & percentage increase in remuneration for each director.
2. The median remuneration of employees and average increase in remuneration of employees does not include MD’s remuneration.
3. The median remuneration of employees and average increase in remuneration for employees and the Key Managerial personnel is determined based on annualised remuneration.
For and on behalf of the Board of Directors
August 27, 2015 Mumbai
Yogesh Gaat
Managing Director & CEO (DIN 07189252)
S.Ravi
Director (DIN 00009790)
STCI FINANCE LIMITED
(Formerly known as Securities Trading Corporation of India Limited)
58
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STCI FINANCE LIMITED
(Formerly known as Securities Trading Corporation of India Limited)
59
FORM NO. MR-3SECRETARIAL AUDIT REPORT
FOR THE FINANCIAL YEAR ENDED 31ST MARCH, 2015 [Pursuant to section 204(1) of the Companies Act, 2013 and rule No. 9 of the Companies
(Appointment and Remuneration Personnel) Rules, 2014]
To The Members, STCI Finance Limited A/B 1-802, A wing, 8th Floor, Marathon Innova, Marathon Nextgen Compound, Off Ganpatrao Kadam Marg, Lower Parel (W), Mumbai 400013.
Dear Sir / Madam,
We have conducted the secretarial audit of the compliance of applicable statutory provisions and the adherence to good Corporate Governance practice by STCI Finance Limited (hereinafter called “the Company”). Secretarial Audit was conducted in a manner that provided us a reasonable basis for evaluating the corporate conducts / statutory compliances and expressing our opinion thereon.
Based on our limited verification of the Company’s books, papers, minutes books, forms and returns filed with regulatory authorities and other records maintained by the Company and also the information provided by the Company, its officers, agents and authorized representatives during the conduct of secretarial audit, we hereby report that in our opinion, the Company has, during the financial year ended 31st March, 2015, complied with the statutory provisions listed hereunder and also that the Company has proper Board processes and compliance mechanism in place to the extent, in the manner and subject to the reporting made hereinafter:
We further report that maintenance of proper and updated books, papers, minutes books, filing of forms and returns with applicable regulatory authorities and maintaining other records is responsibility of management and of the Company, our responsibility is to verify the content of the documents and returns produce before us, make objective evaluation of the content in respect of compliance and report thereon.
We have examined on test basis, the books, papers, minute books, forms and returns filed and other records maintained by the Company and produced before us for the financial year ended 31st March, 2015, according to the provisions of:
(i) The Companies Act, 2013 and the rules made there under; (including the statutory Books maintained by Company in terms of Provisions of Companies Act, 1956 which are in force, during our Audit Period).
ANNEXURE VII
STCI FINANCE LIMITED
(Formerly known as Securities Trading Corporation of India Limited)
60
(ii) The Securities Contracts (Regulation) Act, 1956 (‘SCRA’) and the rules made there under;
(iii) The Depositories Act, 1996 and the Regulations and Bye-laws framed there under;
(iv) Foreign Exchange Management Act, 1999 and the rules and regulations made there under to the extent of Foreign Direct Investment, Overseas Direct Investment and External Commercial Borrowings - The same was not applicable to the Company, during the year under review;
(v) The following Regulations and Guidelines prescribed under the Securities and Exchange Board of India Act, 1992 (‘SEBI Act’):-
(a) The Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 2011
(b) The Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 1992;
(c) The Securities and Exchange Board of India (Registrars to an Issue and Share Transfer Agents) Regulations, 1993, regarding the Companies Act and dealing with client;
(d) The Securities and Exchange Board of India (Issue and Listing of Debt Securities) Regulations, 2008;
(v) Provisions of Reserve Bank of India Act, 1934 and Regulations/ Guidelines issued by Reserve Bank of India from time to time as applicable to Non- deposit accepting NBFCs.
We have also verified systems and mechanism which are in place and as followed by Company to ensure compliance of other applicable Laws (in addition to the above mentioned Laws applicable to the Company). We have also relied on the representation made by the Company and its Officers in respect of systems adopted by the Company from time to time to ensure compliances applicable to the Company and found the same satisfactory.
We have also examined compliance with the applicable clauses of the Debt Listing Agreements entered into by the Company with National Stock Exchange of India Limited.
We further Report that, during the year, either there was no event attracting the below mentioned provisions or it was not mandatory on the part of the Company to comply with the following Provisions, Regulations / Guidelines:
The Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009 (to the extent applicable);
(a) The Securities and Exchange Board of India (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999;
(b) The Securities and Exchange Board of India (Delisting of Equity Shares) Regulations, 2009;
(c) The Securities and Exchange Board of India (Buy Back of Securities) Regulations, 1998;
SECRETARIAL AUDIT REPORT
STCI FINANCE LIMITED
(Formerly known as Securities Trading Corporation of India Limited)
61
(e) Secretarial Standards issued by The Institute of Company Secretaries of India under the provisions of Companies Act, 1956
Based on the above said information provided by the Company, we report that during the financial year under report, the Company has complied with the provisions of the above mentioned Act/s including the applicable provisions of the Companies Act, 1956 / 2013 and Rules, Regulations, Guidelines, Standards, etc. mentioned above and we have no material observation of instances of non Compliance in respect of the same.
We further report that:
The Board of Directors of the Company is duly constituted with proper balance of Executive Directors, Non-Executive Directors and Independent Directors. The changes in the composition of the Board of Directors that took place during the year under review were carried out in compliance with the provisions of the Act.
We also report that adequate notice/s were given to all directors to schedule the Board Meetings, agenda and detailed notes on agenda were sent at least seven days in advance, and a reasonable system exists for Board Members for seeking and obtaining further information and clarifications on the agenda items before the meeting and for meaningful participation at the meeting.
Majority decision is carried through and proper system is in place which facilitates / ensure to capture and record, the dissenting member’s views, if any, as part of the minutes.
Based on the representation made by the Company and its Officers explaining us in respect of internal systems and mechanism established by the Company which ensures compliances of other Acts, Laws and Regulations applicable to the Company, we report that there are adequate systems and processes in the Company commensurate with the size and operations of the Company to monitor and ensure compliance with applicable laws, rules, regulations and guidelines.
We further report that during the audit period the following specific events/action had a major bearing on the Company’s affairs and statutory compliances in pursuance of the above referred laws, rules, regulations, guidelines etc. viz.
(i) Issue, Allotment and Listing of Secured Redeemable Non Convertible Debentures worth Rs. 300 Crore and
(ii) Issue, Allotment and Listing of Secured Redeemable Non Convertible Debentures worth Rs. 200 Crore.
Name:- Nilesh Shah For:- Nilesh Shah & Associates Date:- April 28, 2015 FCS : 4554 Place:- Mumbai C.P. : 2631
SECRETARIAL AUDIT REPORT
STCI FINANCE LIMITED
(Formerly known as Securities Trading Corporation of India Limited)
62
Report on the Standalone Financial Statements
We have audited the accompanying standalone financial statements of STCI Finance Limited (‘the Company’) which comprise the Balance Sheet as at March 31, 2015, and the Statement of Profit and Loss and Cash Flow statement for the year then ended, and a summary of significant accounting policies and other explanatory information.
Management’s responsibility for the Standalone financial statements
The Company’s Board of Directors is responsible for the matters stated in section 134(5) of the Companies Act 2013 (“the Act”) with respect to the preparation of these standalone financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Accounting Standards specified under section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014. This responsibility also includes maintenance of adequate accounting records in accordance with the provision of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
Auditors’ responsibility
Our responsibility is to express an opinion on these standalone financial statements based on our audit.
We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the Audit report under the provisions of the Act and the Rules made thereunder.
We have conducted our audit in accordance with the Standards on Auditing under section 143(10) of the Act. Those Standards require that, we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Company’s preparation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on whether the Company has in place an adequate internal financial controls system over financial reporting and the operating effectiveness of such controls. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by Company’s Directors, as well as evaluating the overall presentation of the standalone financial statements.
INDEPENDENT AUDITORS’ REPORT TO THE MEMBERS OF STCI FINANCE LIMITED (FORMERLY SECURITIES TRADING CORPORATION OF INDIA LIMITED)
STCI FINANCE LIMITED
(Formerly known as Securities Trading Corporation of India Limited)
63
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the standalone financial statements.
Opinion
In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with accounting principles generally accepted in India of the state of affairs of the Company as at March 31, 2015, and its profits and its cash flows for the year ended on that date.
Report on other legal and regulatory requirements
1. As required by the Companies (Auditor’s Report) Order, 2015 (“the Order”) issued by the Central Government of India in terms of sub-section (11) of section 143 of the Companies Act, 2013, we give in the Annexure I a statement on the matters specified in paragraphs 3 and 4 of the Order, to the extent applicable.
2. As required by section 143(3) of the Act, we report that:
a. We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purpose of our audit;
b. In our opinion, proper books of account, as required by law, have been kept by the Company so far as it appears from our examination of those books;
c. The Balance Sheet, Statement of Profit and Loss and Cash Flow Statement dealt with by this Report are in agreement with the books of account;
d. In our opinion, the aforesaid standalone financial statements comply with the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014.
e. on the basis of written representations received from the directors as on March 31, 2015, and taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2015, from being appointed as a director in terms of section 164(2) of the Companies Act, 2013.
f. With respect to the other matters to be included in the Auditor’s Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us:
i. The Company has disclosed the impact of pending litigations on its financial position in its financial statements – Refer Note 6.1 to the financial statements
ii. The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses.
INDEPENDENT AUDITORS’ REPORT TO THE MEMBERS OF STCI FINANCE LIMITED (FORMERLY SECURITIES TRADING CORPORATION OF INDIA LIMITED)
STCI FINANCE LIMITED
(Formerly known as Securities Trading Corporation of India Limited)
64
INDEPENDENT AUDITORS’ REPORT TO THE MEMBERS OF STCI FINANCE LIMITED (FORMERLY SECURITIES TRADING CORPORATION OF INDIA LIMITED)
iii. There were no amounts which were required to be transferred to the Investor Education and Protection Fund by the Company during the year ended 31st March, 2015.
3. As required by section 143(5) of the Act and in pursuance of directions referred to in the letter dated 22nd April, 2015 issued by the Office of the C & A.G of India for the year ended March 31, 2015, we report that:
i. According to the information and explanations given to us, the Company has not been selected for disinvestment.
ii. According to the information and explanations given to us, there are no cases of waiver/ write off of debts/loans/interest etc. for the financial year 2014-15.
iii. According to the information & explanation given to us, the Company does not have any inventories lying with third parties & assets received as gift from Govt. or other authorities.
iv. According to the information & explanation given to us, the list of the pending legal/arbitration cases on the Company for financial year 2014-15 is enumerated in Annexure II. Further, there exists an effective monitoring mechanism for expenditure on all legal cases.
For and on behalf of A .J. Shah & Co. Chartered Accountants Firm Registration No. : 109477W
Devendra J. Shrimanker April 28, 2015 Partner Mumbai Membership No.: 41920
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(Formerly known as Securities Trading Corporation of India Limited)
65
i. a. The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets.
b. As explained to us, the Company has decided to carry out physical verification of fixed assets once in every three years. In our opinion, the frequency of verification of the fixed assets is reasonable having regard to the size of the Company and the nature of its assets. As explained to us, physical verification has not been carried out during the year.
ii. a. The securities held as stock in trade are in dematerialized form with custodian. Statement of securities is received from the custodian on regular basis and the same is reconciled by the management at regular intervals.
b. As securities are held in dematerialized form, the requirement of physical verification does not arise.
c. The Company is maintaining proper records of securities held as stock in trade. As informed to us, the statements of securities obtained from custodians are verified with book records and no discrepancies were noticed during the year under audit.
iii. The Company has not granted loans, secured or unsecured to companies, firms or parties covered in the register maintained under section 189 of the Companies Act, 2013. Accordingly, provisions of clause 3(iii)(a) and (b) are not applicable to the Company.
iv. In our opinion and according to information and explanations given to us, there are adequate internal control procedures commensurate with the size of the Company and the nature of its business for the purchase of fixed assets and purchase and sale of securities. During the course of our audit, we have not come across any continuing failure to correct major weakness in the aforesaid internal control system.
v. The Company has not accepted any deposits during the year from the public within the meaning of the provisions of sections 73 to 76 or any other relevant provisions of the Companies Act and rules framed there under. Accordingly, the provisions of clause 3(v) of the Order are not applicable.
vi. According to the information and explanations given to us, the Central Government has not specified maintenance of cost records under sub-section (1) of section 148 of the Companies Act, 2013. Accordingly, the provisions of clause 3(vi) of the Order are not applicable.
vii. a. According to the information and explanations given to us and based on the records examined by us, except for stamp duty on transaction of Non Government securities, (Refer Note 20) the Company is regular in depositing undisputed statutory dues including provident fund, employees’ state insurance, income-tax, sales-tax, wealth tax, service tax, duty of customs, duty of excise, value added tax, cess and any other statutory dues with the appropriate authorities. Amount relating to above and remaining outstanding as at the year end for a period of more than six months from the date it became payable is stamp duty on Non‐ Government securities aggregating to `62.65 lacs.
ANNEXURE TO THE INDEPENDENT AUDITORS’ REPORT Annexure I : Referred to in paragraph 1 under “Report on other legal and regulatory requirements” of our report of even date
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b. According to the information and explanations given to us and based on the records examined by us, there are no dues of wealth tax, service tax, duty of customs, duty of excise, value added tax and cess which have not been deposited on account of any dispute. The demands in respect of tax deducted at source and income tax for the following years have not been deposited on account of disputes:
Statute Nature of Dues
Amount (` in lakhs)
Period to which the amount
relates
Forum where dispute is pending
Income Tax Act, 1961
Income tax 8.06 Financial Year 2007-08
CIT(Appeal)
Income Tax Act, 1961
Tax deducted at source
3.54 Financial Year 2008 – 09
Assistant Commissioner of Income tax – TDS – 3(2)
Income Tax Act, 1961
Tax deducted at source
2.94 Financial Year 2009 – 10
Assistant Commissioner of Income tax – TDS – 3(2)
Income Tax Act, 1961
Tax deducted at source
10.72 Financial Year 2010 – 11
Assistant Commissioner of Income tax – TDS – 3(2)
Income Tax Act, 1961
Income tax 52.61 Financial Year 2011-12
CIT (Appeal)
c. According to the information and explanations given to us, there was no amount which was required to be transferred to investor education and protection fund in accordance with the relevant provisions of the Companies Act, 1956 (1 of 1956) and rules made thereunder. Accordingly, the provisions of clause 3(vii)( c) of the Order are not applicable.
viii. There are no accumulated losses at the end of the financial year. The Company has not incurred any cash losses during the current year and immediately preceding financial year.
ix. According to the information and explanations given to us and based on the records examined by us, the Company has not defaulted in repayment of dues to banks and debenture holders during the year. The Company has not raised any funds from financial institutions.
x. According to information and explanation given to us, the Company has not given any guarantee for loans taken by others - its subsidiaries and associates from banks or financial institutions.
xi. According to information and explanation given to us and based on the records examined by us, the Company has not availed any term loans during the year and therefore, provisions of clause 4(xi) are not applicable to the Company.
xii. According to the information and explanations given to us, no fraud on or by the Company has been noticed or reported during the year.
ANNEXURE TO THE INDEPENDENT AUDITORS’ REPORT Annexure I : Referred to in paragraph 1 under “Report on other legal and regulatory requirements” of our report of even date
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(Formerly known as Securities Trading Corporation of India Limited)
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ANNEXURE TO THE INDEPENDENT AUDITORS’ REPORT Annexure II: Referred to in paragraph 3(iv) under “Report on other legal and regulatory requirements” of our report of even date
List of Legal / Arbitration Cases Pending
Dipsuted legalMatters
Disputed by Last 1 year 1‐3 year beyond 3 years Reasonsfor
pendencyNo. ofCases
AmtInvolved
(` InLacs)
No. ofCases
AmtInvolved
(` InLacs)
No. ofCases
AmtInvolved
(` InLacs)
Income Tax Matters
Company 4 485.67 5 280.67 0 0Appeal
filed andawaitinghearing/ hearing
in process
Income Tax Matters
IT Department 1 20.15 2 35.14 3 425.29
Legal cases under Negotiable instruments Act
Company 0 0 13 3309.82 1 150
Monetary Suit Company 1 872.67 0 0 0 0
For and on behalf of A .J. Shah & Co. Chartered Accountants Firm Registration No. : 109477W
Devendra J. Shrimanker April 28, 2015 Partner Mumbai Membership No.: 41920
STCI FINANCE LIMITED
(Formerly known as Securities Trading Corporation of India Limited)
68
AUDITORS’ REPORT
To the Board of Directors of
STCI FINANCE LIMITED(FORMERLY SECURITIES TRADING CORPORATION OF INDIA LIMITED)
As required by Non Banking Financial Companies Auditor’s Report (Reserve Bank) Directions, 2008 issued by Reserve Bank of India, we enclose a statement on the matters specified in paragraph 3 of the said directions on the basis of such checks of the books and records as were considered appropriate and according to the information and explanations given to us in the course of audit.
A. i) The Company has applied for registration under section 45IA of Reserve Bank of India Act, 1934 (2 of 1934), and Reserve Bank of India has granted certificate of registration (CoR) bearing no. 13.00005 date 16.12.1997.
ii) The Company is entitled to continue to hold such CoR in terms of its asset / income pattern as on 31.03.2015.
iii) During the year, the Company continues to be classified as Loan Company as defined in Non Banking Financial Companies Acceptance of Public Deposits (Reserve Bank) Directions, 1998.
B. i) The Board of Directors has passed resolution on April 26, 2014 for non-acceptance of the public deposit.
ii) The Company has not accepted public deposit during the year under review.
iii) The Company has complied with the prudential norms relating to income recognition, accounting standards, asset classification and provisioning for bad and doubtful debts, as applicable to it in terms of Non-Banking Financial (Non-Deposit Accepting or Holding) Companies Prudential Norms (Reserve Bank) Directions, 2007
iv) a) The Company has correctly disclosed capital adequacy ratio in form NBS – 7 in the return submitted to the bank. It is in compliance with the minimum CRAR prescribed by the bank.
b) Yes, the Company has furnished to the bank the annual statement of capital funds, risk assets / exposures and risk asset ratio (NBS – 7) within the stipulated period.
For and on behalf of A .J. Shah & Co. Chartered Accountants Firm Registration No. : 109477W
Devendra J. Shrimanker May 20, 2015 Partner Mumbai Membership No.: 41920
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(Formerly known as Securities Trading Corporation of India Limited)
69
The preparation of financial statements of STCI Finance Limited for the year ended 31 March 2015 in accordance with the financial reporting framework prescribed under the Companies Act, 2013 is the responsibility of the management of the company. The statutory auditor appointed by the Comptroller and Auditor General of India under section 139(5) of the Act is responsible for expressing opinion on the financial statements under section 143 of the Act on independent audit in accordance with the standards on auditing prescribed under section 143(10) of the Act. This is stated to have been done by them vide their Audit Report dated 28th April 2015.
I, on the behalf of the Comptroller and Auditor General of India, have decided not to conduct the supplementary audit of the financial statements of STCI Finance Limited for the year ended 31 March 2015 and as such have no comments to make under section 143(6)(b) of the Act.
COMMENTS OF THE COMPTROLLER AND AUDITOR GENERAL OF INDIA UNDER SECTION 143(6) (b) OF THE COMPANIES ACT, 2013 ON THE ACCOUNTS OF STCI FINANCE LIMITED FOR THE YEAR ENDED 31 MARCH 2015
For and on behalf of theComptroller and Auditor General of India
(Roop Rashi)Principal Director of Commercial Audit &
Ex-officio Member, Audit Board-I, MumbaiPlace: MumbaiDate: 17 July 2015
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(Formerly known as Securities Trading Corporation of India Limited)
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BALANCE SHEET AS AT MARCH 31, 2015(` in lakhs)
Particulars NoteNo.
As at March 31, 2015
As at March 31, 2014
I EQUITY AND LIABILITIES
1 Shareholders' Funds
(a) Share capital 1.1 38,000.00 38,000.00
(b) Reserves and surplus 1.2 63,513.93 52,004.83
Sub‐Total ‐ (1) 101,513.93 90,004.83
2 Non Current Liabilities
(a) Long term borrowings 2.1 70,000.00 50,000.00
(b) Deferred tax liabilities (net) 2.2 0.00 52.30
(c) Long term provisions 2.3 19,701.65 13,107.32
Sub‐Total ‐ (2) 89,701.65 63,159.62
3 Current Liabilities
(a) Short term borrowings 3.1 208,627.70 208,384.09
(b) Trade payables 3.2 59.33 33.60
(c) Other current liabilities 3.3 36,109.20 1,042.03
(d) Short term provisions 3.4 5,024.29 5,616.13
Sub‐Total ‐ (3) 249,820.52 215,075.85
TOTAL (1+2+3) 441,036.10 368,240.30
II ASSETS
1 Non-current Assets
(a) Fixed assets (net) 4.1
i) Tangible assets 2,469.64 2,625.70
ii) Intangible assets 0.33 0.99
(b) Non current investments 4.2 41,086.31 62,403.69
(c) Deferred tax assets (net) 2.2 473.19 0.00
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(Formerly known as Securities Trading Corporation of India Limited)
71
Particulars NoteNo.
As at March 31, 2015
As at March 31, 2014
(d) Long term loans and advances 4.3 156,901.54 106,127.04
(e) Other non current assets 4.4 113.54 872.20
Sub‐Total ‐ (1) 201,044.55 172,029.62
2 Current Assets
(a) Current investments 5.1 3,878.06 995.40
(b) Inventories 5.2 158.70 1,600.04
(c) Trade receivables 5.3 20.63 297.57
(d) Cash and bank balances 5.4 1,894.48 2,126.81
(e) Short term loans and advances 5.5 226,433.24 186,834.52
(f) Other current assets 5.6 7,606.44 4,356.34
Sub‐Total ‐ (2) 239,991.55 196,210.68
TOTAL (1+2) 441,036.10 368,240.30
The accompanying notes are an integral part of the financial statements.
As per our report of even date
For and on behalf ofA. J. Shah & Co.Chartered Accountants Firm Registration No. 109477W
Devendra J. Shrimanker Partner Membership No. 41920
Mumbai April 28, 2015
On behalf of the Board of Directors
Mrs. V.R. Iyer Chairperson
T.C. Venkat Subramanian Director
S. Ravi Director
S. Venkateswarlu Managing Director
Kamlesh Rathi Chief Financial Officer
Suparna Sharma Company Secretary
MumbaiApril 28, 2015
BALANCE SHEET AS AT MARCH 31, 2015(` in lakhs)
STCI FINANCE LIMITED
(Formerly known as Securities Trading Corporation of India Limited)
72
STATEMENT OF PROFIT AND LOSS FOR THE YEAR ENDED MARCH 31, 2015
(` in lakhs)
Particulars NoteNo.
For the year ended
March 31, 2015
For the year ended
March 31, 2014
I Revenue from Operations
a) Interest income 7.1 42,696.92 33,495.66
b) Other financial services 7.2 1,508.23 1,117.75
c) Profit/(Loss) on sale of securities 7.3 640.16 171.88
44,845.31 34,785.29
II Other income 8 1,476.69 520.95
III Total Revenue (I+II) 46,322.00 35,306.24
IV Expenses
Employee benefit expenses 9 675.64 638.96
Finance costs 10 25,916.88 18,413.25
Depreciation and amortisation expenses 4.1 164.59 161.43
Other expenses 11 552.59 552.31
Provision against loans and advances 12 1,073.56 999.58
Total Expenses 28,383.26 20,765.53
V Profit before exceptional and extraordinary items and tax (III ‐ IV)
17,938.74 14,540.71
VI Exceptional items (Refer Note No. 23 & 24) 3,218.89 0.00
VII Profit before tax (V+VI) 21,157.63 14,540.71
VIII Tax expenses
i) Current tax 6,400.00 5,160.00
Less: MAT credit entitlement 0.00 0.00
ii) Deferred tax (525.49) 236.79
iii) Short / (Excess) provision for tax of earlier year(s)
(92.86) 0.00
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(Formerly known as Securities Trading Corporation of India Limited)
73
Particulars NoteNo.
For the year ended
March 31, 2015
For the year ended
March 31, 2014
IX Profit for the year (VII‐VIII) 15,375.98 9,143.92
X CSR Expenses (Refer Note No. 29) 208.00 0.00
XI Profit available for appropriation (IX‐X) 15,167.98 9,143.92
XII Earning per equity share of par value of ` 100/‐ each
i) Basic earnings per share (EPS) in ` 19 40.46 24.06
ii) Diluted earnings per share (EPS) in ` 19 40.46 24.06
The accompanying notes are an integral part of the financial statements.
STATEMENT OF PROFIT AND LOSS FOR THE YEAR ENDED MARCH 31, 2015
(` in lakhs)
As per our report of even date
For and on behalf ofA. J. Shah & Co.Chartered Accountants Firm Registration No. 109477W
Devendra J. Shrimanker Partner Membership No. 41920
Mumbai April 28, 2015
On behalf of the Board of Directors
Mrs. V.R. Iyer Chairperson
T.C. Venkat Subramanian Director
S. Ravi Director
S. Venkateswarlu Managing Director
Kamlesh Rathi Chief Financial Officer
Suparna Sharma Company Secretary
MumbaiApril 28, 2015
STCI FINANCE LIMITED
(Formerly known as Securities Trading Corporation of India Limited)
74
NOTE NO. 1.1: SHARE CAPITAL
Particulars As at March 31, 2015
As at March 31, 2014
Authorised
50,000,000 (PY* - 50,000,000) Equity shares of `100/-each 50,000.00 50,000.00
50,000.00 50,000.00
Issued, subscribed, and fully paid up
Equity Share Capital
38,000,000 (PY - 38,000,000) Equity shares of ` 100/- each fully paid up
38,000.00 38,000.00
Total 38,000.00 38,000.00
*PY stands for Previous Year throughout the financial statements
a) Details of Shareholding as at March 31, 2015
i) 11,383,781 number of equity shares of ̀ 100/- each are held by Bank of India, the largest shareholder of the company.
ii) Shareholders holding more than 5% of equity shares of the company are as under.
Name of Shareholder As at March 31, 2015 As at March 31, 2014
No of Shares % of holding No of Shares % of holding
Bank of India 11,383,781 29.96% 11,383,781 29.96%
Infrastructure Development Finance Company Limited
3,530,136 9.29% 3,530,136 9.29%
State Bank of India 2,812,415 7.40% 2,812,415 7.40%
IDBI Bank Limited 2,507,610 6.60% 2,507,610 6.60%
b) Details of shares bought back during past five years
Year in which shares bought back Class of Shares No of shares
Financial Year 2009-10 Equity Shares 3,000,000
Total equity shares bought back in last five years of ` 100/‐ each
3,000,000
NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED MARCH 31, 2015(` in lakhs)
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(Formerly known as Securities Trading Corporation of India Limited)
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NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED MARCH 31, 2015
(` in lakhs)
c) Reconciliation of the number of equity shares outstanding of ` 100/‐ each
Particulars As at March 31, 2015
As at March 31, 2014
Number of shares at the beginning of year 38,000,000 38,000,000
Add: Shares issued 0 0
Less: Share bought back / forfeited 0 0
Number of shares at the end of year 38,000,000 38,000,000
d) Each equity share is entitled to one vote per share. The Company has only one class of equity shares having par value of ` 100/‐each.
Particulars As at March 31, 2015
As at March 31, 2014
Reserve created pursuant to Section 45 I C of RBI Act, 1934*
Balance at the beginning of the year 29,320.00 27,491.00
Add :- Amount transferred from surplus in statement of profit and loss
3,076.00 1,829.00
Balance at the end of the year (A) 32,396.00 29,320.00
* Forms part of free reserves, Net owned funds and Tier I capital
Capital Redemption Reserve
Balance at the beginning of the year 12,000.00 12,000.00
Add :- Amount transferred from surplus in statement of profit and loss 0.00 0.00
Balance at the end of the year (B) 12,000.00 12,000.00
Surplus in Statement of Profit and Loss
Balance at the beginning of the year 10,684.83 6,926.56
Add :- Profit for the year (after tax & CSR Expenses) 15,167.98 9,143.92
Profit available for appropriation 25,852.81 16,070.48
Less : Appropriations
Statutory Reserve (as per Section 45IC of the RBI Act, 1934) 3,076.00 1,829.00
Proposed dividend on equity shares, DPS* ` 8/- (March 31, 2014, DPS ` 8/-)
3,040.00 3,040.00
NOTE NO. 1.2: RESERVES AND SURPLUS
STCI FINANCE LIMITED
(Formerly known as Securities Trading Corporation of India Limited)
76
NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED MARCH 31, 2015
(` in lakhs)
Particulars As at March 31, 2015
As at March 31, 2014
Tax on proposed dividend 618.88 516.65
Net surplus in statement of profit and loss (C) 19,117.93 10,684.83 *DPS = Dividend Per Share
Total (A+B+C) 63,513.93 52,004.83
Note No. 2.1: Long Term Borrowings
Particulars As at March 31, 2015
As at March 31, 2014
a) Secured
Redeemable Non Convertible Debentures (NCD’s) 70,000.00 50,000.00
b) Unsecured 0.00 0.00
Total 70,000.00 50,000.00
Details of outstanding NCD’s
Particulars Maturity Date
As at March 31, 2015 As at March 31, 2014
Current Maturities
Non Current portion
Current Maturities
Non Current portion
3,000 (PY-3,000) 9.75% NCDs 8-Feb-16 30,000.00 0.00 0.00 30,000.00
2,000 (PY-2000) 10.15% NCDs 17-Jan-17 0.00 20,000.00 0.00 20,000.00
3,000 (PY-Nil) 9.67% NCDs 25-Jun-19 0.00 30,000.00 0.00 0.00
2,000 (PY-Nil) 9.89% NCDs 30-Jul-19 0.00 20,000.00 0.00 0.00
30,000.00 70,000.00 0.00 50,000.00
Above NCDs are redeemable at par and secured by way of first charge on specific receivables and registered mortgage of the Company’s immovable properties with an overall asset cover of 125%. (Refer Note No 28)
STCI FINANCE LIMITED
(Formerly known as Securities Trading Corporation of India Limited)
77
NOTE NO. 2.2: DEFERRED TAX (ASSETS) / LIABILITIES (NET)
Company has accounted for the deferred tax assets and liabilities in respect of the timing differences through the statement of profit and loss. The components of the Deferred Tax (Asset) /Liability are as under .
Particulars As at March 31, 2015
Charge during the year
As at March 31, 2014
Deferred Tax Liability
Depreciation on fixed assets 177.49 15.80 161.69
Amortisation of NCD Issue Expenses 75.07 12.30 62.77
252.56 28.10 224.46
Deferred Tax Asset
Provision for leave encashment & gratiuity 49.40 9.81 39.59
Provision for payment of stamp duty 21.29 0.00 21.29
Other provisions – PLVP/Amortisation 114.86 3.58 111.28
Provision for non-performing assets (NPA) 540.20 540.20 0.00
Total Deferred Tax Assets 725.75 553.59 172.16
Total (473.19) (525.49) 52.30
NOTE NO. 2.3: LONG TERM PROVISIONS
Particulars As at March 31, 2015
As at March 31, 2014
For employee benefits (as per actuarial valuation) 93.18 68.67
For taxation 18,930.03 12,524.22
Contingent provision against standard assets 488.47 362.54
For amortisation of premium on debt investments 100.96 62.88
Others 89.01 89.01
Total 19,701.65 13,107.32
NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED MARCH 31, 2015
(` in lakhs)
STCI FINANCE LIMITED
(Formerly known as Securities Trading Corporation of India Limited)
78
NOTE NO. 3.1: SHORT TERM BORROWINGS
Particulars As at March 31, 2015
As at March 31, 2014
I. Secured Borrowings
a. Loan repayble on demand
- from banks 0.00 0.00
- from other parties 0.00 0.00
b. Other loans and advances (CBLO borrowings) 15,000.00 26,550.00
Total of Secured Borrowings ‐ (I) 15,000.00 26,550.00
II. Unsecured Borrowings
a. Loan repayble on demand
- from banks* 78,627.70 84,634.09
- from other parties 0.00 0.00
b. Other loans and advances (Commercial Papers) 115,000.00 97,200.00
Total of Unsecured Borrowings ‐ (II) 193,627.70 181,834.09
Total (I + II) 208,627.70 208,384.09
* Includes loan of `49,591.84 lakhs (PY `48,530.18 lakhs) from related party “Bank of India”
Additional information to secured/unsecured borrowings:
i) Secured short term borrowings
Company has borrowed `15,000.00 lakhs (PY - `26,550.00 lakhs) under CBLO (maturing on April 06, 2015) at weighted average cost of 8.63% (PY 12.38%) against the collateral of government securities. Government securites having face value of `21,000.00 lakhs (PY - ` 36,000.00 lakhs) and Cash margin of ` 200.00 lakhs (PY - ̀ 200.00 lakhs) has been kept as collateral with Clearing Corporation of India Limited for CBLO borrowings.
ii) Unsecured short term bank borrowings
Bank credit lines, Short term loans and overdraft facilities have been utilised from various banks for financing activities, working capital requirement and asset liability management. These credit facilities are repayable as per terms of sanction or on demand and subject to annual review. Break up of the unsecured bank borrowings as on March 31, 2015 are as under.
NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED MARCH 31, 2015
(` in lakhs)
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(Formerly known as Securities Trading Corporation of India Limited)
79
Name of the lending Bank
Rate of Interest Sanctioned Limit
Outstanding as at
March 31, 2015
Maturity Date
Bank Of India
i) Overdraft Base Rate+ 25 bps - 10.45%
20,000.00 19,591.84
On Demand
(Base Rate+ 35 bps - 10.55%)
(20,000.00) (18,530.18) On Demand
ii) Cash Credit / Short term loan Base Rate+ 15 bps - 10.35%
30,000.00 20,000.00 16-Mar-2016
10,000.00 23-Mar-2016
(10,000.00) (12-Dec-2014)
(Base Rate+ 15 bps - 10.35%)
(30,000.00) (10,000.00) (26-Dec-2014)
(10,000.00) (24-Mar-2015)
Corporation Bank - Overdraft Base Rate + 35 bps - 10.60%
20,000.00 10,034.45 On Demand
(Base Rate + 20 bps - 10.45%)
(20,000.00) (15,067.57) On Demand
Union Bank of India - Overdraft Base Rate + 20 bps - 10.20%
10,000.00 9,501.41 On Demand
(Base Rate + 20 bps - 10.45%)
(10,000.00) (9,013.32) On Demand
Kotak Mahindra bank - Overdraft - 0.00 0.00
(11..00%) (2,500.00) (2,023.02) On Demand
Andhra Bank - Short Term Loan Base Rate + 15 bps - 10.40%
10,000.00 9,500.00 11-May-2015
(Base Rate + 15 bps - 10.40%)
(10,000.00) (10,000.00) (28-Sept-2014)
Details given in the brackets indicate previous year data.
NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED MARCH 31, 2015(` in lakhs)
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(Formerly known as Securities Trading Corporation of India Limited)
80
NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED MARCH 31, 2015(` in lakhs)
iii) Commercial Paper borrowings
Company raises unsecured short term funds by issuing Commercial Papers. During the year, funds have been raised through commercial papers at different rate of interest ranging from 8.40% to 9.70% (PY 8.25% to 12.90%). Details of outstanding unsecured commercial papers borrowings as on March 31, 2015 are as under:
Particulars Outstanding as at March 31 , 2015
Outstanding as at March 31, 2014
Date of Maturity
Maturity Amount
Date of Maturity
Maturity Amount
Commercial Paper (issued on 27-Mar-2015) 28-May-15 7,500.00
Commercial Paper (issued on 30-Mar-2015) 19-Jun-15 5,000.00
Commercial Paper (issued on 31-Oct-2014) 14-Sep-15 5,000.00
Commercial Paper (issued on 28-Oct-2014) 15-Sep-15 10,000.00
Commercial Paper (issued on 05-Nov-2014) 15-Sep-15 7,500.00
Commercial Paper (issued on 21-Oct-2014) 25-Sep-15 10,000.00
Commercial Paper (issued on 05-Nov-2014) 25-Sep-15 2,500.00
Commercial Paper (issued on 20-Oct-2014) 28-Sep-15 9,000.00
Commercial Paper (issued on 03-Nov-2014) 30-Sep-15 5,000.00
Commercial Paper (issued on 29-Oct-2014) 27-Oct-15 6,000.00
Commercial Paper (issued on 07-Nov-2014) 05-Nov-15 10,000.00
Commercial Paper (issued on 12-Nov-2014) 10-Nov-15 10,000.00
Commercial Paper (issued on 13-Nov-2014) 13-Nov-15 10,000.00
Commercial Paper (issued on 13-Nov-2014) 13-Nov-15 5,000.00
Commercial Paper (issued on 13-Nov-2014) 13-Nov-15 2,500.00
Commercial Paper (issued on 26-Mar-2015) 23-Mar-16 10,000.00
Commercial Paper (issued on 04-Mar-2014) 02-May-14 10,000.00
Commercial Paper (issued on 20-May-2013) 09-May-14 1,700.00
Commercial Paper (issued on 14-Mar-2014) 13-May-14 10,000.00
Commercial Paper (issued on 10-Mar-2014) 23-May-14 5,000.00
STCI FINANCE LIMITED
(Formerly known as Securities Trading Corporation of India Limited)
81
NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED MARCH 31, 2015(` in lakhs)
Particulars Outstanding as at March 31 , 2015
Outstanding as at March 31, 2014
Date of Maturity
Maturity Amount
Date of Maturity
Maturity Amount
Commercial Paper (issued on 03-Mar-2014) 30-May-14 10,000.00
Commercial Paper (issued on 10-Mar-2014) 04-Jun-14 2,500.00
Commercial Paper (issued on 10-Mar-2014) 06-Jun-14 2,500.00
Commercial Paper (issued on 18-Mar-2014) 10-Jun-14 2,500.00
Commercial Paper (issued on 21-Mar-2014) 13-Jun-14 10,000.00
Commercial Paper (issued on 18-Mar-2014) 16-Jun-14 7,500.00
Commercial Paper (issued on 14-Aug-2013) 13-Aug-14 5,500.00
Commercial Paper (issued on 07-Oct-2013) 12-Sep-14 10,000.00
Commercial Paper (issued on 15-Oct-2013) 14-Oct-14 10,000.00
Commercial Paper (issued on 04-Mar-2014) 04-Mar-15 10,000.00
Total Maturity Amount 115,000.00 97,200.00
iv) During the year, Company has not defaulted either on principal or interest payment for any of the borrowings.
STCI FINANCE LIMITED
(Formerly known as Securities Trading Corporation of India Limited)
82
NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED MARCH 31, 2015(` in lakhs)
NOTE NO. 3.2: TRADE PAYABLES
Particulars As at March 31, 2015
As at March 31, 2014
Trade Payable
- Due to micro and small enterprises (Refer Note No. 16) 0.00 0.00
- Other than micro and small enterprises
i. to subsidiaries 0.00 0.00
ii. to others 58.78 32.89
Others
- Due to micro and small enterprises (Refer Note No. 16) 0.00 0.00
- Other than micro and small enterprises
i. to subsidiaries 0.00 0.00
ii. to others 0.55 0.71
Total 59.33 33.60
NOTE NO. 3.3: OTHER CURRENT LIABILITIES
ParticularsAs at
March 31, 2015As at
March 31, 2014
Current maturities of Long-term borrowings (Refer Note 2.1) 30,000.00 0.00
- Interest accrued but not due on borrowings 4,442.45 888.27
(including related party amount of ` 45.07 lakhs, PY- ` 33.73 lakhs)
- Statutory dues 1.36 1.30
- Margin money and other deposits 1,665.39 152.46
Total 36,109.20 1,042.03
NOTE NO. 3.4: SHORT TERM PROVISIONS
Particulars As at March 31, 2015
As at March 31, 2014
Provision for emplyee benefits (as per actuarial valuation) 52.16 47.80
Provision for performance linked variable pay 207.72 264.51
Contingent provision against standard assets (Refer Note No. 22) 1,105.53 1,747.17
Provision for proposed dividend 3,040.00 3,040.00
Provision for dividend distribution tax 618.88 516.65
Total 5,024.29 5,616.13
STCI FINANCE LIMITED
(Formerly known as Securities Trading Corporation of India Limited)
83
NO
TES
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INA
NCI
AL
STAT
EMEN
TS F
OR
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YEA
R EN
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MA
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31,
201
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NO
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4.1
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, 201
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Up
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the
year
Ded
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Adj
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ents
Up
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Mar
ch
31, 2
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As
at
Mar
ch
31, 2
015
As
at
Mar
ch
31, 2
014
ITa
ngib
le A
sset
s
a)
Air-
Con
ditio
ners
24.4
10.
180.
0024
.59
8.57
2.46
0.00
11.0
313
.56
15.8
4
b)
Build
ings
*3,
237.
270.
000.
003,
237.
2775
6.24
124.
050.
0088
0.29
2,35
6.98
2,48
1.03
c)
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pute
rs61
.68
5.47
0.00
67.1
553
.19
6.68
0.00
59.8
77.
288.
49
d)
Elec
tric
al In
stal
latio
ns38
.01
0.00
0.00
38.0
114
.07
3.69
0.00
17.7
620
.25
23.9
4
e)
Furn
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& F
ixtu
res
119.
480.
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0011
9.48
64.3
49.
160.
0073
.50
45.9
855
.14
f)
Offi
ce E
quip
men
ts39
.95
1.78
0.54
41.1
917
.79
14.1
10.
5431
.36
9.83
22.1
6
g)
Vehi
cles
30
.49
0.00
4.93
25.5
611
.39
3.34
4.93
9.80
15.7
619
.10
Sub‐
tota
l (I)
3,55
1.29
7.43
5.47
3,55
3.25
925.
5916
3.49
5.47
1,08
3.61
2,46
9.64
2,62
5.70
Mar
ch 3
1, 2
014
3,54
8.39
23.4
920
.59
3,55
1.29
779.
8715
9.63
13.9
192
5.59
2,62
5.70
2,76
8.52
IIIn
tang
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Ass
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a)
Soft
war
e an
d Li
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es29
.96
0.44
0.00
30.4
028
.97
1.10
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30.0
70.
330.
99
Sub‐
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l (II)
29.9
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440.
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.96
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.97
0.99
2.79
IIIG
rand
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al ‐
(I+I
I)3,
581.
257.
875.
473,
583.
6595
4.56
164.
595.
471,
113.
682,
469.
972,
626.
69
Mar
ch 3
1, 2
014
3,57
8.35
23.4
920
.59
3,58
1.25
807.
0416
1.43
13.9
195
4.56
2,62
6.69
2,77
1.31
* Co
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STCI FINANCE LIMITED
(Formerly known as Securities Trading Corporation of India Limited)
84
NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED MARCH 31, 2015
(` in lakhs)
NOTE NO. 4.2: NON CURRENT INVESTMENTS
Particulars Face Value
Quantity As at March 31,
2015
As at March 31,
2014
I. Trade Investments
a) Investment in Equity Shares (Unquoted and fully paid)
Clearing Corporation of India Limited (PY 5,000,000)
` 10/- 5,000,000 500.00 500.00
500.00 500.00
b) Investment in Equity Shares of Subsidiaries (Unquoted and fully paid)
STCI Primary Dealer Limited (Refer Note No - 23) ` 10/- 150,000,000 15,000.00 16,600.00
(Wholly owned subsidiary company) (PY: 166,000,000)
STCI Commodities Limited 1 ` 10/- 4,500,000 126.15 126.15
(Wholly owned subsidiary company) (PY: 4,500,000)
15,126.15 16,726.15 1 Net of provision for permanent diminution in value of ` 260.79 lakhs (PY ` 260.79 lakh). STCI Commodities Limited has discontinued business operations with effect from September 2011. It is in the process of liquidating its assets and settle all liabilities.The investment amount reflects the estimated net realisable amount, based on its audited financials as at March 31,2015
Total Trade Investments (A) 15,626.15 17,226.15
II. Non‐Trade Investments
a) Investment in Equity Shares (Quoted and fully paid)
Bharat Heavy Electricals Limited (PY - 138,180) ` 2/- 1,38,180 428.20 428.20
Cromption Greaves Lmited (PY - 40,000) ` 2/- 40,000 77.93 77.93
Future Retail Limited (ex-Pantaloon Retail) (PY -45,000)
` 2/- 45,000 82.41 82.41
Hero Motocorp ltd (PY- Nil) ` 2/- 500 13.09 0.00
ITC Ltd (PY- Nil) ` 1/- 35,000 120.60 0.00
STCI FINANCE LIMITED
(Formerly known as Securities Trading Corporation of India Limited)
85
Particulars Face Value
Quantity As at March 31,
2015
As at March 31,
2014
NTPC Limited (PY - 150,000) `10/- 1,50,000 227.01 227.01
Power Grid Corp of India Limited (PY - 127,746) ` 10/- 60,000 80.25 140.27
Bharti Airtel Limited (PY - 70,000) ` 5/- 0 0.00 238.44
Hindustan Petroleum Corporation Ltd (PY-20,000)
` 10/- 0 0.00 64.88
Indian Oil Corporation Limited (PY - 50,000) ` 10/- 0 0.00 152.41
LIC Housing Finance Ltd (PY - 1,50,000) ` 2/- 0 0.00 127.70
Sadbhav Engineering Limited (PY - 94,894) ` 1/- 0 0.00 142.15
The Federal Bank Limited (PY - 1,50,000) ` 2/- 0 0.00 143.06
Sub Total (a) 1,029.49 1,824.46
b) Investment in Government Securities (Quoted) *
8.20% GS 2022 (PY Face Value ` 2,500 lakhs) ` 2,500 lakhs 2,535.90 2,535.90
8.15% GS 2022 (PY Face Value - ` 10,000 lakhs) ` 7,500 lakhs 7,604.41 10,098.91
8.26% GS 2027 (PY Face Value - ` 2,500 lakhs) ` 2,500 lakhs 2,656.60 2,656.60
8.28% GS 2032 (PY Face Value - ` 7,500 lakhs) ` 6,500 lakhs 6,694.10 7,680.65
8.33% GS 2032 (PY Face Value - ` 500 lakhs) ` 500 lakhs 529.50 529.50
8.33% GS 2036 (PY Face Value - ` 6,000 lakhs) ` 500 lakhs 511.25 6,087.00
8.30% GS 2042 (PY Face Value - ` 3,000 lakhs) ` 1,000 lakhs 1,070.00 3,107.95
8.17% GS 2044 (PY Face Value -Nil) ` 500 lakhs 511.68 0.00
8.33% GS 2026 (PY Face Value - ` 2,000 lakhs) - 0.00 1,991.25
8.20% GS 2025 (PY Face Value - ` 1,500 lakhs) - 0.00 1,490.25
8.28% GS 2027 (PY Face Value - ` 00 lakhs) - 0.00 524.00
Sub Total (b) 22,113.44 36,702.01
* Kept as collateral to the extent of face value of `21,000.00 lakhs (PY `36,000.00 lakhs) with CCIL for CBLO borrowing.
NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED MARCH 31, 2015(` in lakhs)
STCI FINANCE LIMITED
(Formerly known as Securities Trading Corporation of India Limited)
86
NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED MARCH 31, 2015(` in lakhs)
Particulars Face Value
Quantity As at March 31,
2015
As at March 31,
2014
c) Investment in Corporate Bonds (Quoted)
10% STFL (maturing 30.06.2015) (PY -3,920) 2 `1 lakhs - 0.00 3,878.06
9.85% SBI (maturing 27.06.2016) (PY -50) `10 lakhs 50 514.20 514.20
8.60% LIC Hsg. Finance Ltd (maturing 31.05.2020) (PY- 100)
`10 lakhs - 0.00 938.30
Sub Total (c) 514.20 5,330.56 2 Dislcosed under current investment in view of its residual maturity period.
d) Investment in Venture Capital Funds (Unquoted and partly paid)
Tata Venture Capital Funds-class A units (PY: 250,000,000)
` 1 250,000,000 1,803.03 1,320.51
Amount paid per unit - ` 0.7212 (PY ` 0.5282)
Uncalled capital contribution as on March 31, 2015 is ` 696.97 lakhs (PY ` 1,179.49 lakhs)
Sub Total (d) 1,803.03 1,320.51
Total Non Trade Investments (B)=(a+b+c+d) 25,460.16 45,177.54
Total Non Current Investments (A + B) 41,086.31 62,403.69
Aggregate book value of quoted investments 23,657.13 43,857.03
Aggregate market value of quoted investments 23,524.57 40,502.96
Aggregate amount of unquoted investments (net of provision for diminution)
17,429.18 18,546.66
Aggregate provision for diminuition in value of unquoted investments 260.79 260.79
Net decline of ` 158.84 lakhs (PY ` 359.02 lakhs) in value of quoted equity shares & ` Nil (PY - ` 3,040.47) in value of government securities, is considered to be of temporary nature and accordingly not provided for.
STCI FINANCE LIMITED
(Formerly known as Securities Trading Corporation of India Limited)
87
NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED MARCH 31, 2015(` in lakhs)
NOTE NO. 4.3: LONG TERM LOANS AND ADVANCES
Particulars As at March 31, 2015
As at March 31, 2014
I. Secured, Considered Good (Refer Note No. 28)
a. Loan against shares 65,612.92 54,580.61
b. Corporate and other loans 71,435.20 36,695.64
Gross long term loans and advances * 137,048.12 91,276.25
Less:- Provision for non performing assets 3 2,222.78 633.51
Net long term loans and advanes 134,825.34 90,642.74
* All non performing loans and advances have been treated as non current assets.
II. Unsecured, Considered Good
a. Loan against shares 2,166.41 2,455.58
b. Capital advances 1.05 1.05
c. Advance income and wealth tax payments 19,675.20 12,794.48
d. Security deposits 233.54 233.19
22,076.20 15,484.30 3 Includes provision for unsecured loans and advances
Total 156,901.54 106,127.04
NOTE NO. 4.4: OTHER NON CURRENT ASSETS
Particulars As at March 31, 2015
As at March 31, 2014
Unamortized NCD issue expenses 113.54 97.31
Income accrued but not due on loans and advances 0.00 774.89
Total 113.54 872.20
STCI FINANCE LIMITED
(Formerly known as Securities Trading Corporation of India Limited)
88
NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED MARCH 31, 2015(` in lakhs)
NOTE NO. 5.1 : CURRENT INVESTMENTS
Particulars Face Value Quantity As at March 31, 2015
As at March 31, 2014
Investment in Corporate Bonds (Quoted)
10% STFL (30.06.2015) (PY - 3,920) ` 1 lakhs 3920 3,878.06 0.00
9.62% L & T Finance Ltd (PY-100) (Maturing on 29.09.2014)
` 10 lakhs - 0.00 995.40
3,878.06 995.40
Aggregate book value of quoted investments 3,878.06 995.40
Aggregate market value of quoted investments 3,922.72 1,000.74
Aggregate amount of unquoted investments 0.00 0.00
Aggregate provision for dimunition in value of investments 0.00 0.00
The investment in 10% STFL Bonds has been disclosed as current investment in view of it maturing within 12 months from the date of balance sheet. However, the valuation of same has been done as per its original classification of long term investments at book cost less permanent diminution in value, if any.
NOTE NO. 5.2 : INVENTORY (STOCK‐IN‐TRADE)
Particulars As at March 31, 2015
As at March 31, 2014
Government Securities-(Quoted) 40.49 1,355.42
FI & Other Bonds -(Quoted) 18.75 0.00
Equity Shares-(Quoted) 99.46 244.62
Total 158.70 1,600.04
i) The cost for each security under the relevant category is calculated on weighted average basis. Inventory/Current Investment in each category is valued scrip-wise, at cost or market value whichever is lower. Net Depreciation in each category is provided for/charged to the Profit and Loss account. Net appreciation, in the category, if any, is ignored. Depreciation in one category is not set off against appreciation in another category.
The net depreciation in value of securities held as inventory (stock-in-trade) as on March 31, 2015 under each category has been provided for as under. Type of Security As at
March 31, 2015As at
March 31, 2014a) Government Securities (including SDL) 0.00 29.40
b) Equity shares 1.95 0.00 Total 1.95 29.40
STCI FINANCE LIMITED
(Formerly known as Securities Trading Corporation of India Limited)
89
NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED MARCH 31, 2015(` in lakhs)
ii) Quantitative details of stock, purchases and sales of securities during the year ended March 31, 2015 is as under.
For the year ended March 31, 2015 (No. in units)
Security ‐Category Op. Balance Purchase Sales/Transfer Cl. Balance
Government Securities 1,540,500 27,000,000 28,500,000 40,500
FI & Other Bonds 0 150,000 0 150,000
Mutual Fund Units 0 704,239,252 704,239,252 0
Equity Shares 93,000 2,449,313 2,537,313 5,000
Total 1,633,500 733,838,565 735,276,565 195,500
For the year ended March 31, 2014 (No. in units)
Security ‐Category Op. Balance Purchase Sales/Transfer Cl. Balance
Government Securities 4,540,500 89,500,000 92,500,000 1,540,500
Mutual Fund Units 0 532,758,419 532,758,419 0
Equity Shares 171,387 2,165,033 2,243,420 93,000
Total 4,711,887 624,423,452 627,501,839 1,633,500
iii) Stock-in-trade
Nomenclature As at March 31, 2015 As at March 31, 2014
Face Value
` in lakhs
Book Value Face Value
` in lakhs
Book Value
Government Securities ‐ (Quoted)7.16% GS 2023 0.00 0.00 1,500.00 1,344.33 8.49% Andhara SDL 2020 40.40 40.40 40.40 40.40 7.46% GOI 2017 0.05 0.05 0.05 0.05 6.13% GOI 2028 0.05 0.04 0.05 0.04
40.49 1,384.82 Less:- Net depreciation in value of securities 0.00 29.40 Sub Total (a) 40.49 1,355.42
FI & Other Bonds ‐ (Quoted)8.49% NTPC BONDS 2025 18.75 18.75 0.00 0.00 Less:- Net depreciation in value of securities 0.00 0.00 Sub Total (b) 18.75 0.00
STCI FINANCE LIMITED
(Formerly known as Securities Trading Corporation of India Limited)
90
NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED MARCH 31, 2015(` in lakhs)
Nomenclature Face Value In `
As at March 31, 2015 As at March 31, 2014Quantity Book Value Quantity Book Value
Equity Shares‐ (Quoted)Bata India Limited 10/- 1,500 16.66 0 0.00 Hero Motocorp Limited 2/- 500 13.34 0 0.00 Larsen & Toubro Limited 2/- 1,000 17.03 0 0.00 Tata Consultancy Services Limited 1/- 1,500 40.11 0 0.00 UltraTech Cement Limited 10/- 500 14.27 0 0.00 ICICI Bank 10/- 3,000 37.74 Oriental Bank of Commerce 10/- 25,000 52.43 Tata Motors Limited 2/- 10,000 39.77 Zee Entertainment Enterprises Limited 1/- 25,000 69.63 Tata Global Beverages Limited 1/- 30,000 45.05
101.41 244.62 Less:- Net depreciation in value of securities 1.95 0.00 Sub Total (c) 99.46 244.62
Total‐(a+b+c) 158.70 1,600.04
NOTE NO. 5.3 : TRADE RECEIVABLES
Particulars As at March 31, 2015
As at March 31, 2014
Unsecured, Considered good
- Outstanding for a period exceeding six months from the date they are due for payment
0.00 0.00
- Others 20.63 297.57
Total 20.63 297.57
STCI FINANCE LIMITED
(Formerly known as Securities Trading Corporation of India Limited)
91
NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED MARCH 31, 2015(` in lakhs)
NOTE NO. 5.4: CASH AND BANK BALANCES
Particulars As at March 31, 2015
As at March 31, 2014
I. Cash and Cash Equivalents
- Balance with banks 994.43 631.80
- Cash on hand 0.05 0.01
II. Other Bank Balances (held as Margin Money)
- Fixed deposits with original maturity of more than 3 months but less than or equal to 12 months
500.00 500.00
- Fixed deposits with original maturity of more than 12 months
400.00 995.00
Total 1,894.48 2,126.81
i) Margin Money for equity derivatives is given in the form of fixed deposit. Fixed deposit includes (a) ` 150.00 lakhs (PY- ` 495.00 lakhs) in the name of National Securities Clearing Corporation Limited towards margin requirements for Equity Futures & Options segment, and (b) ` 250.00 (PY - ` 500.00 lakhs ) with custodian - HDFC Bank for meeting margin requirements for equity segment.
ii) Fixed deposit of ̀ 500.00 lakhs (PY- ̀ 500.00 lakhs) is kept with HDFC bank as margin money for settlement of G-sec trades.
iii) Residual maturity of above fixed deposits is less than one year.
STCI FINANCE LIMITED
(Formerly known as Securities Trading Corporation of India Limited)
92
NOTE NO. 5.6: OTHER CURRENT ASSETS
Particulars As at March 31, 2015
As at March 31, 2014
Accrued interest 2,092.45 1,275.62
Other current assets 5,513.99 3,080.72
Total 7,606.44 4,356.34
NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED MARCH 31, 2015(` in lakhs)
NOTE NO. 5.5: SHORT TERM LOANS AND ADVANCES
ParticularsAs at
March 31, 2015As at
March 31, 2014
I. Secured, Considered Good (Refer Note No.28)
a. Loan against shares 186,708.74 174,327.80
b. Corporate and other loans 33,556.48 10,811.11
220,265.22 185,138.91
II. Unsecured, Considered Good
a. Loan against shares 6,117.09 1,654.64
b. Other loans and advances 50.93 40.97
6,168.02 1,695.61
Total (I+II) 226,433.24 186,834.52
STCI FINANCE LIMITED
(Formerly known as Securities Trading Corporation of India Limited)
93
NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED MARCH 31, 2015(` in lakhs)
NOTE NO. 6.1: CONTINGENT LIABILITIES (TO THE EXTENT NOT PROVIDED FOR)
Claims against the company not acknowledged as debt:
a) The Company had received a notice from the Central Excise authorities in respect of the interior work amounting to ` 20.80 lakh carried out by a contractor at the erstwhile office premises at Krishna Chambers, 59, Sir Vithaldas Thackersey Marg, New Marine Lines, Mumbai in the year 1997-98. The Company has been legally advised that there is no liability under the Central Excise Act and accordingly no provision has been made against this claim.
b) No provision has been made in respect of following disputed tax dues under Income Tax act 1961. The tax liability under dispute is ` 928.24 lakhs (PY ` 914.98 lakhs).
Disputed /Appeal Filed by Disputed tax liability
Period to which dispute relates
Forum where dispute is pending
Income Tax Department ` 76.39 lakhs F.Y.1999-00 Mumbai High Court
Income Tax Department ` 100.82 lakhs F.Y. 2000-01 Mumbai High Court
Income Tax Department ` 248.08 lakhs F.Y. 2002-03 Mumbai High Court
Company ` 0.08 lakhs F.Y. 2007-08 Assessing Officer
Company ` 153.00 lakhs F.Y. 2007-08 CIT (Appeal)
Company ` 3.54 lakhs F.Y. 2008-09 ACIT - TDS - 3 (2)
Company ` 2.94 lakhs F.Y. 2009-10 ACIT - TDS - 3 (2)
Income Tax Department/Company ` 30.11 lakhs F.Y. 2009-10 ITAT
Company ` 10.72 lakhs F.Y. 2010-11 ACIT - TDS - 3 (2)
Company ` 249.95 lakhs F.Y. 2010-11 ITAT
Company ` 52.61 lakhs F.Y. 2011-12 CIT (Appeal)
c) No provision has been made for stamp duty on non-government securities transactions for the period up to 31st March 2006. (Refer Note No. 20)
NOTE NO. 6.2: CAPITAL AND OTHER COMMITMENTS:
a) Estimated amount of contracts remaining to be executed on capital account and not provided for (net of advances) is ` 0.35 lakhs (PY - ` 0.35 lakhs).
b) Uncalled capital contribution to Tata Venture Capital Fund as on March 31, 2015 is ` 696.97 lakhs (PY- ` 1,179.49 lakhs).
STCI FINANCE LIMITED
(Formerly known as Securities Trading Corporation of India Limited)
94
NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED MARCH 31, 2015(` in lakhs)
Particulars For the year endedMarch 31, 2015
For the year endedMarch 31, 2014
Interest on Loans
- Loan against shares 30,380.31 25,091.07
- Corporate and other loans 8,586.61 3,895.75
Interest / Discount on Investments
- Government securities 4 3,042.35 3,120.59
- Corporate bonds 5 568.62 662.80
- Other money market instruments and CBLO 9.42 555.08
Others 109.61 170.37
Total 42,696.92 33,495.66 4 Interest income from government securities includes ` 2,960.47 lakhs (PY ` 2,965.84 lakhs) on long
term investments in government securities.
5 Interest income from corporate bonds includes ` 568.59 lakhs (PY ` 662.80 lakhs) on long term investments in corporate bonds.
NOTE NO. 7.2: OTHER FINANCIAL SERVICES
Particulars For the year endedMarch 31, 2015
For the year endedMarch 31, 2014
Upfront / Processing fees 1,429.44 823.83
Other fee based income 78.79 293.92
Total 1,508.23 1,117.75
NOTE NO. 7.3: PROFIT/(LOSS) ON SALE OF SECURITIES
Particulars For the year endedMarch 31, 2015
For the year endedMarch 31, 2014
a) Government securities (4.05) (2.98)
b) Equity shares 139.04 99.10
c) Corporate Bonds 0.00 0.00
d) Mutual fund units 501.84 96.91
e) Derivatives 3.33 (21.15)
Total 640.16 171.88
NOTE NO. 7.1: INTEREST INCOME
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(Formerly known as Securities Trading Corporation of India Limited)
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Particulars For the year endedMarch 31, 2015
For the year endedMarch 31, 2014
a) Government Securities
Sales (net of brokerage) 28,120.93 95,103.80
Add : Stock at the end of the year 40.49 1,355.42
Less : (i) Purchases 26,810.05 91,858.23
(ii) Stock at the beginning of the year 1,355.42 4,603.97
Profit/(Loss) on sale of Government Securities (4.05) (2.98)
b) Equity Shares
Sales (net of brokerage and STT) 13,360.27 9,617.38
Add : Stock at the end of the year 99.46 244.62
Less : (i) Purchases 13,076.07 9,311.78
(ii) Stock at the beginning of the year 244.62 451.12
Profit/(Loss) on sale of Equity Shares 139.04 99.10
c) Corporate Bonds
Sales (net of brokerage) 0.00 0.00
Add : Stock at the end of the year 18.75 0.00
Less : (i) Purchases 18.75 0.00
(ii) Stock at the beginning of the year 0.00 0.00
Profit/(Loss) on sale of Equity Shares 0.00 0.00
d) Mutual Fund Units
Sales (net of exit load and STT) 707,561.84 264,536.91
Add : Stock at the end of the year 0.00 0.00
Less : (i) Purchases 707,060.00 264,440.00
(ii) Stock at the beginning of the year 0.00 0.00
Profit/(Loss) on sale of Mutual Fund Units 501.84 96.91
NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED MARCH 31, 2015(` in lakhs)
STCI FINANCE LIMITED
(Formerly known as Securities Trading Corporation of India Limited)
96
NOTE NO. 8: OTHER INCOME
Particulars For the year endedMarch 31, 2015
For the year endedMarch 31, 2014
Interest income on tax refunds 43.36 0.00
Dividend income 6 198.61 118.04
Income from Venture Capital Fund (Net of Taxes) 7 122.13 0.00
Net gain/(loss) on sale of investments 1,021.21 342.14
Provisions no longer required written back 80.70 39.70
Miscellaneous income 10.68 21.07
Total 1,476.69 520.95 6 Dividend income includes ` 193.51 lakhs (PY ` 112.08 lakhs) being dividend received on investments
(other than subsidiary). Dividend recevied from subsidiary ` -Nil (PY -` Nil)
7 Includes prior period income of ` 75.05 lakhs (PY ` Nil) (Refer Note No. 18)
NOTE NO. 9: EMPLOYEE BENEFIT EXPENSES
Particulars For the year endedMarch 31, 2015
For the year endedMarch 31, 2014
Salaries, wages, allowances, etc. 621.92 584.04
Contribution to provident and other funds 31.11 28.41
Staff welfare expenses 22.61 26.51
Total 675.64 638.96
NOTE NO. 10: FINANCE COSTS
Particulars For the year endedMarch 31, 2015
For the year endedMarch 31, 2014
a) Interest expenses
On bank credit line / overdraft 3,290.47 1,831.00
On CP issuance 11,822.55 10,698.74
On CBLO borrowing 2,125.13 2,427.52
On NCD issuance 8,508.12 3,336.56
25,746.27 18,293.82
b) Other borrowing cost 170.61 119.43
Total (a+b) 25,916.88 18,413.25
NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED MARCH 31, 2015(` in lakhs)
STCI FINANCE LIMITED
(Formerly known as Securities Trading Corporation of India Limited)
97
NOTE NO. 11: OTHER EXPENSES
Particulars For the year endedMarch 31, 2015
For the year endedMarch 31, 2014
Advertising expenses 0.06 1.11
Transaction and settlement charges 30.73 33.96
Donation 0.00 5.00
Electricity charges 22.37 20.19
Information services 57.32 77.36
Insurance charges 12.87 12.53
Miscellaneous expenses 3.99 2.44
Office expenses 42.05 35.49
Payment to Auditors :
- As audit fees (including audit fees for consolidated accounts) 6.50 6.00
- For taxation matters (Tax Audit fees) 1.25 1.25
- For other services 1.25 1.25
- For reimbursement of expenses 0.11 0.00
Postage, telephone and telegrams 17.79 17.70
Printing and stationery expenses 8.59 8.73
Professional fees 202.17 197.63
Rates and taxes 9.30 9.40
Rent 18.14 19.23
Repairs and maintenance - building 31.61 31.92
Repairs and maintenance - others 19.62 17.63
Sitting fees to directors 12.74 11.68
Travelling, conveyance and car expenses 16.28 19.96
Amortisation of premium on debt investments 38.08 20.62
(Profit)/Loss on sale of asset (0.23) 1.23
Total 552.59 552.31
NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED MARCH 31, 2015(` in lakhs)
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(Formerly known as Securities Trading Corporation of India Limited)
98
NOTE NO. 12: PROVISION AGAINST LOANS AND ADVANCES
Particulars For the year endedMarch 31, 2015
For the year endedMarch 31, 2014
Contingent provision against standard assets (Refer Note No. 22)
(515.71) 879.15
Provision against non performing assets 1,589.27 120.43
Total 1,073.56 999.58
NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED MARCH 31, 2015(` in lakhs)
STCI FINANCE LIMITED
(Formerly known as Securities Trading Corporation of India Limited)
99
NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED MARCH 31, 2015
NOTE NO. 13: SIGNIFICANT ACCOUNTING POLICIES
13.1 Basis of Preparation of Accounts
The financial statements have been prepared under historical cost convention on accrual basis to comply in all material aspects with applicable accounting principles in India, the Accounting Standards (AS) specified under section 133 of the Companies Act 2013, read with Rule 7 of the Companies (Accounts) Rules, 2014 and Reserve Bank of India directions to Non Banking Finance Companies (NBFCs). The accounting policies have been consistently applied by the Company and are consistent with those used in the previous year. All assets and liabilities have been classified as current and non-current as per company’s normal operating cycle and other criteria set out in the schedule III of the Companies Act, 2013. Based on the nature of services and their realization in cash and cash equivalents, the company has ascertained its operating cycle as 12 months for the purpose of current /non-current classification of assets and liabilities.
13.2 Use of Estimates
The preparation of financial statements, in conformity with generally accepted accounting principles, requires the management to make estimate and assumptions that affects the reported amount of assets, liabilities and disclosure of contingent liabilities as at the date of financial statements and revenue & expenses for the reporting period. Actual results could differ from those estimates. Any revision to accounting estimates is recognised prospectively in current and future periods.
13.3 Revenue Recognition and Related Disclosures
(i) Treasury Bills, Commercial Papers, Certificate of Deposits and Zero Coupon Bonds
The difference between the acquisition cost and the redemption value is apportioned on time basis and recognised as income. The same is included in the carrying amount of these securities and the aggregate amount is regarded as cost for the purpose of valuation of stock-in-trade.
(ii) Government Securities, Corporate Bonds
Income from Fixed Income securities is taken into account on accrual basis, provided that interest rate on these instruments is pre-determined and interest is serviced regularly and is not in arrears. The amounts paid and received towards accrued interest on the purchases and sales of Government securities and Corporate Bonds are netted off at the year-end and are also recognised as income under “Interest on Government Securities” and “Interest on Corporate Bonds” respectively.
Accordingly, in respect of the transactions in government securities and corporate bonds dealt with on outright basis, acquisition cost and sale proceeds are the contracted purchase price and sale price respectively.
(iii) Collateralized Borrowing and Lending Obligation (CBLO) Transactions
Transactions for borrowing and lending under CBLO are recorded at maturity value. The difference paid or received on redemption is treated as discount paid on CBLO in case of borrowing and
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NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED MARCH 31, 2015
discount earned on CBLO in case of lending. The difference between the discounted value on borrowing date or lending date as the case may be, and the redemption value of the instrument, outstanding on the Balance Sheet date is apportioned on the time basis and recognized as expense or income respectively. The unamortised discount on CBLO borrowing and lending is disclosed under other current assets and other current liabilities respectively.
(iv) Pass Through Certificates (PTCs)
The difference between the acquisition cost (as reduced by the proportionate amount of inflows) and the redemption value is apportioned on time basis (using the IRR at the time of acquisition) and recognised as accrued income. This accrued income is added to the acquisition cost (as reduced by the proportionate amount of inflows) of the respective Pass Through Certificates (PTCs) and the sum is regarded as cost (book value) for the purpose of valuation of stock-in-trade. Any income received on prepayments is added to the income.
(v) Equity Futures and Options
(a) The initial margin and the additional margin in form of fixed deposits paid for entering into contracts for equity futures and options are disclosed under the head cash and cash equivalents in the Balance Sheet.
(b) “Equity Option Premium Account” represents the premium paid or received for buying or selling the options, respectively. The net premium paid or received for buying or selling the option, as the case may be, is recognised as profit or loss for all settled/expired contracts. Similarly, on the expiry of the contracts and on exercising the options, the difference between the final settlement price and the strike price is recognised as profit or loss. Gains or losses on stock / index futures and option contracts are recognized on squaring up of positions or on expiry of contracts.
(c) The open positions are marked to market on the balance sheet date and net losses, if any, are provided for while net gains, if any, are not recognized.
(d) The daily mark-to-market margin paid to/ received in respect of equity futures trades is debited or credited to the daily mark-to-market equity futures account and the same is disclosed under trade receivable or trade payable, as the case may be.
(e) “Income on Equity Futures and Options” represents the net profit or loss on settled/expired positions in equity index and stock futures and options after adjusting brokerage and other transaction costs.
(vi) Commodity Futures
(a) The initial margin and the additional margin paid on open positions of commodity futures are disclosed under the head Loans and Advances in the Balance Sheet.
(b) The daily mark-to-market margin paid to/ received from in respect of commodity futures trades is debited or credited to the daily mark-to-market margin commodity futures account and the same is disclosed under the head trade receivable or trade payable in the Balance
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Sheet, as the case may be. The balance in this account represents net unrealised gains or losses on open positions.
(c) The open positions are marked to market on the balance sheet date and net losses, if any, are provided for while net gains, if any, are not recognized.
(d) “Income on Commodity Futures” represents the net profit or loss on settled/expired positions in commodity futures after adjusting brokerage and other transaction costs.
(vii) The brokerage, Securities Transaction Tax (STT) and other cost incurred in connection with the acquisition of securities are added to the cost of acquisition. The amount shown under sale of securities is net of brokerage and STT.
(viii) Dividend income is recognised when the right to receive the same is established.
(ix) Profit/Loss from trading in equities is recognised on the basis of weighted average cost on trade dates. Profit/Loss from trading in government securities, corporate bonds, mutual fund units and other securities are recognised on the basis of weighted average cost on settlement dates.
(x) Interest income from loan transactions is recognised on accrual basis by applying the interest rate implicit in such contracts except in the case of income on Non Performing Assets (NPAs) which is recognised on realisation, in terms of RBI Guidelines. Processing fees on loans is recognised as income on accrual basis.
(xi) In case of securities transferred from Stock-in-Trade to Investment Account, the same is reckoned as sale at market price. Resultant gains or losses are recognised in the profit and loss account on the date of transfer.
(xii) Repo/Reverse Repo transactions for corporate bonds are treated as borrowing and lending transactions. The difference between the 1st leg and 2nd leg of repo and reverse repo transaction is accounted as interest expense/income on corporate bonds repo, as the case may be, over the period of contract.
(xiii) Interest Rate Swaps
Gains or losses on Interest Rate Swaps (IRS) are accounted for on settlement dates as per the terms of the contract. The net interest income/expense in respect of the contracts outstanding as at the year end is accounted on accrual basis in respect of contracts entered into for hedging purposes.
13.4 Investments
In terms of Non Banking Financial Companies Prudential Norms Direction issued by RBI, long term investments are valued at cost comprising acquisition cost and incidental expenses less permanent diminution in value, if any. Provision for diminution in the value of long term investments is made to recognise a decline other than temporary in the value of investments. In the case of debt instruments where the cost of acquisition is more than the redemption value, the difference is amortized over the period till maturity and charged to the Profit and Loss account.
NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED MARCH 31, 2015
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(Formerly known as Securities Trading Corporation of India Limited)
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NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED MARCH 31, 2015
Investments other than long-term investments are classified as current investments and valued at cost or market value whichever is less.
13.5 Classification and Valuation of Stock‐in‐Trade/Current Investments
Company provides net depreciation category-wise for securities held as stock-in-trade/current investments.
All the securities acquired with the intention of trading are considered as stock-in-trade and shown under current assets.
(i) All quoted securities (stock-in-trade) are grouped into the following categories.
Equity Shares Preference Shares Debenture and Bonds Govt. Securities (including T Bills) Mutual Fund Units Others
(ii) Stock/current investment in each category is valued scrip-wise, at cost or market value whichever is lower.
The cost is calculated on weighted average basis. Market value for fixed income securities is determined by the prices declared by Fixed Income Money Market and Derivatives Association of India (FIMMDA). Market value for equity shares is determined by the prices obtained from the recognised stock exchanges.
However, in line with the RBI & FIMMDA guidelines, Certificates of Deposit (CDs) and Commercial Papers (CPs) of less than one year tenor are valued at cost. Similarly, Treasury Bills held as stock-in-trade are valued at carrying cost (as explained at Note. No. 13.3 (i) above).
(iii) Unquoted units of Mutual Fund are valued at Net Asset Value (NAV) or cost whichever is lower.
(iv) Net depreciation in each category is provided for/charged to the Profit & Loss account. Net appreciation, in the category, if any, is ignored.
(v) Depreciation in one category is not set off against appreciation in another category.
13.6 Fixed Assets and Depreciation
Fixed assets (Tangible and Intangible) are stated at original cost less accumulated depreciation. Cost includes all direct costs attributable to acquisition, installation and commissioning.
Depreciation on fixed assets other than buildings and improvement to leasehold property is provided on the straight line method based on the estimated useful lives of the assets. Effective April 1, 2014, estimated useful life of fixed assets has been realigned as per Schedule II of the Companies Act, 2013
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and accordingly the estimated useful life of certain fixed assets have been revised per the table given below.
Buildings are depreciated on written down value method at the applicable rates based on estimated useful life prescribed in Schedule II to the Companies Act, 2013.
Depreciation on improvements to leasehold property is provided on straight line method at the rates arrived at on the basis of the primary lease period.
Fixed assets costing less than ̀ 0.05 lakhs, are provided with 100% depreciation in the year of purchase. Depreciation is provided on pro rata basis for assets purchased and sold during the year.
The details of estimated useful life assets (aligned with Schedule II to the Companies Act, 2013) are as under.
Description of Asset Type of Asset Estimated useful Life of Asset wef
01.04.2014
Old Estimated useful life
Building Tangible 60 years 60 years
Furniture and Fixtures Tangible 10 years 10 years
Computers - End User Devices Tangible 3 years 5 years
Computers – Servers & Network Tangible 6 Years 5 Years
Computer Software Intangible 3 years 3 years
Electrical Installations Tangible 10 years 10 years
Air Conditioners Tangible 10 years 10 years
Vehicles Tangible 8 years 8 years
Office Equipments Tangible 5 years 10 years
13.7 Taxes on Income
Provision for income tax comprises the current tax provisions and the net change in the deferred tax asset or liability for the year. Current tax is determined as the amount of tax payable in respect of the taxable income for the year. Deferred tax asset or liability reflects the impact of current year timing differences between taxable income and the accounting income for the year and the reversal of timing differences of earlier years. Deferred tax assets are recognised only to the extent there is a reasonable certainty of sufficient future taxable income being available for its realisation. Deferred tax assets and liabilities are measured using the tax rates and tax laws that have been enacted or substantively enacted by the Balance Sheet date. The effect on deferred tax assets and liabilities of a change in tax rates is recognised in the Statement of Profit and Loss in the period of enactment of the change.
NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED MARCH 31, 2015
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(Formerly known as Securities Trading Corporation of India Limited)
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NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED MARCH 31, 2015
13.8 Securities Accepted as Pledge and Margin Money
Securities or non-cash collateral accepted from a borrower are not recognised as an asset. Margin money received against margin call is shown under Other Current Liabilities.
13.9 Operating Lease
The monthly rent payments made for the premises acquired on lease are charged to statement of profit and loss on accrual basis.
13.10 Employee Benefits
(i) Provident Fund
Contributions as required under the statute, made to the Provident Fund (Defined Contribution Plan) are charged to profit and loss account. There is no obligation other than the monthly contribution payable to the Regional Provident Fund Commissioner.
(ii) Gratuity
The liability of future gratuity benefits is based on the actuarial valuation obtained at year end. The Company has created a trust for future payment of gratuities which is funded through Gratuity cum Life Assurance Scheme of LIC (Defined Benefit Plan).
(iii) Other Benefits
Other long term employee benefits comprise leave encashment and are provided for based on the actuarial valuation. Short term compensated absences are provided on undiscounted basis.
The Projected Unit Credit method has been used to determine the liability on account of gratuity as well as leave encashment. The actuarial gain or loss is immediately recognized in the Profit and Loss Account.
13.11 Borrowing Cost
Borrowing costs are interest and ancillary expenditure incurred by the Company in connection with the borrowing of funds. Interest is charged to the Profit and Loss Account on accrual basis. Ancillary expenditure incurred in connection with the arrangement of borrowing is amortised over the tenure of the respective borrowings.
13.12 Impairment of Assets
An asset is treated as impaired when the carrying cost of asset exceeds its recoverable value. An impairment loss, if any, is charged to the Profit and Loss Account to the extent carrying amount of assets exceeds their recoverable amount in the year in which as asset is identified as impaired.
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13.13 Earning Per Share (E.P.S.)
The basic earnings per share is computed by dividing the net profit after tax by weighted average number of equity shares outstanding during the reporting period. Diluted earnings per equity share is computed by dividing the net profit after tax by the weighted average number of equity shares and dilutive potential equity shares outstanding during the reporting period.
13.14 Provisions and Contingencies
The Company creates a provision when there is a present obligation as a result of past event that probably requires an outflow of resources and a reliable estimate can be made of the obligation. A disclosure of contingent liability is made when there is: (a) a possible obligation (obligation is a possible obligation if, based on the evidence available, its existence at the balance sheet date is considered not probable) that arises from past events and the existence of which will be confirmed only by the occurrence or non occurrence of one or more uncertain future events not wholly within the control of the enterprise (b) a present obligation that arises from past events but is not recognised because (i) it is not probable that an outflow embodying economic benefits will be required to settle the obligation; or (ii) a reliable estimate of the amount of the obligation cannot be made.
13.15 Advances and Provision for Non Performing Assets (NPA) and Standard Assets (SA)
All loans and other credit exposures, where the installments or interest are overdue for a period of six months or more are classified as NPA. Provision is made in respect of NPA and SA, subject to the minimum provision required as per Non-Banking Financial (Non-Deposit Accepting or Holding) Companies Prudential Norms, or where additional specific risks are identified by the management, based on such identification.
NOTES FORMING PART OF FINANCIAL STATEMENTS
14. Related Party Transactions List of related parties
i) Related party where control exists:
a) STCI Primary Dealer Limited – wholly-owned subsidiary
b) STCI Commodities Limited – wholly-owned subsidiary
ii) Other related parties:
Bank of India (BOI) by virtue of its shareholding in the Company being in excess of 20 per cent.
iii) Key Management Personnel:-
a) Mr. S. Venkateswarlu – Managing Director (w.e.f. 01.05.2013)
b) Mr. P. Sanyal – Managing Director (upto 30.04.2013)
c) Mr. Yogesh Gaat – Chief Executive Officer (w.e.f. 17.01.2015)
d) Mr. Kamlesh Rathi – Chief Financial Officer
e) Ms. Suparna Sharma – Company Secretary
There was no transaction with any of the relatives of Key Management Personnel during the year.
NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED MARCH 31, 2015
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All the transactions detailed below are entered into with the parties in ordinary course of business.
Nature of transaction For the year ended March 31, 2015
For the year ended March 31, 2014
BOI Subsidiaries BOI Subsidiaries
Transactions during the year
Purchase of Govt. Securities - 5,565.21 - -
Sale of Government Securities - - - -
Capital Receipt from buyback of shares - 3,731.20 - -
Loans availed 8 194,868.17 - 254,425.00 -
Repayment of Loan availed 8 193,806.52 - 213,294.82 -
Maximum Loan (availed) Outstanding During the Year
49,961.78 - 49,316.00 -
Interest booked 2,365.77 - 1,171.39 -
Dividend Paid 910.70 - 910.70 -
Other financial payments 6.74 - 13.48 -
Reimbursement made for expense - 2.01 - 0.85
Reimbursement of expenses (receipt) - 8.68 - 5.99
Rent paid - - 3.75 -
Sitting fees received - 1.40 - 2.40
Sitting fees paid 1.80 - 1.60 -
Outstanding at the end of the year
Loan availed 49,591.84 - 48,530.18 -
Interest accrued but not due 45.07 - 33.73 -
Balance in current account 4.66 - 4.38 -
8 Includes amounts availed and repaid from overdraft and short term loan accounts.
Remuneration to Key Management Personnel:
Sr. No.
Particulars For the year ended March 31, 2015
For the year ended March 31, 2014
(i) Mr. S. Venkateswarlu (w.e.f. 01.05.2013) 88.25 40.58
(ii) Mr. P. Sanyal (upto 30.04.2013) Nil 24.85
(iii) Mr. Yogesh Gaat (w.e.f. 17.01.2015) 13.82 Nil
(iv) Mr. Kamlesh Rathi 29.25 27.16
(v) Ms. Suparna Sharma 25.13 23.62
The Managing Director is permitted to use the company’s car for official use and private journeys, upto a ceiling of 1000 kms. per month on payment of ` 250 per month.
NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED MARCH 31, 2015(` in lakhs)
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15. Assets taken on Lease
The office premise at Delhi, has been acquired under operating lease on payment of monthly rentals. Future minimum lease rental relating to non-cancellable operating lease period are as under.
Particulars As at March 31, 2015
As at March 31, 2014
Not later than 1 year 18.58 1.29
Later than 1 year but not later than 5 years 21.17 Nil
Later than 5 years Nil Nil
Particulars For the year ended March 31, 2015
For the year ended March 31, 2014
Payment made during the year (excluding taxes) 18.14 15.48
Lease rental charges (including cancellable lease) are recognised in the statement of profit and loss.
16. There are no dues payable to micro, small and medium enterprises in view of the nature of the business of the Company. The Company has not received any intimation from its suppliers regarding status under the Micro, Small and Medium Enterprises Development Act, 2006.
17. Expenditure in Foreign Currency(` in lakhs)
Sr. No. Particulars For the year ended March 31, 2015
For the year ended March 31, 2014
1 On Travel Nil Nil
2 On Interest Nil Nil
3 On Others Nil Nil
Earnings in Foreign Currency : Nil (PY – Nil)
18. Prior Period Income
During the year prior period income of `75.05 lakhs, attributable to Company’s investment in Tata Growth Funds – I has been booked on the basis of confirmation that the annual net distributable income of the fund (earlier and henceforth) would be adjusted towards capital call payment of the investors.
NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED MARCH 31, 2015(` in lakhs)
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19. Earning Per Share (E.P.S.)
The EPS calculation as per AS-20 is as under:
Particulars For the year ended March 31, 2015
For the year ended March 31, 2014
Profit after Tax (` in lakhs) 15,375.98 9,143.92
Weighted average number of shares (Face Value `100 ) 38,000,000 38,000,000
Earning Per Share for the year - Basic & Diluted (in `) 40.46 24.06
20. No stamp duty has been paid on non-government securities transactions in view of the on-going deliberations between Government of Maharashtra and various representative bodies of the participant’s viz. IBA, FIMMDA, PDAI and AMFI, on the applicability of stamp duty on non-government securities’ transactions. The Company has so far not received any claim for stamp duty from the Stamp Office in respect of non-government securities transactions. In the light of an assurance given by the Government of Maharashtra to the Indian Banks’ Association, the liability on non-government securities transactions for the period up to 31st March 2006 has not been provided.
The provision as on March 31, 2015 for stamp duty on non-government securities transactions stands at ` 62.65 lakhs (PY ` 62.65 lakhs) which is for the period commencing 1st April 2006 onwards. The amount of provision as on March 31,2015 is included under the head “Long term provisions” in the balance sheet.
21. The details of provisions as per AS 29 – Provisions, Contingent Liabilities and Contingent Assets is as under.
Particulars Stamp Duty PLVP *
Opening Balance as at April 01, 2014 62.65 264.51
Additions 0.00 200.00
Utilisation 0.00 176.09
Reversal 0.00 80.70
Closing Balance as at March 31, 2015 62.65 207.72
* Performance Linked Variable Pay
Provision for stamp duty was made in respect of stamp duty payable under Bombay Stamp Act,1958 in respect of direct deals for Non SLR transactions. Provision of ̀ 200.00 lakhs (PY ̀ 200.00 lakhs) is made during the year for payment of performance linked variable pay.
NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED MARCH 31, 2015(` in lakhs)
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(Formerly known as Securities Trading Corporation of India Limited)
109
22. Provision of ` 284.29 lakhs (PY ` 379.15 lakhs) has been made during the year to ensure provision of 0.40% on outstanding standard assets as on 31.03.2015. Further, Company has reassessed the additional provision of ̀ 1,000.00 lakhs created for standard assets in earlier years and on reassessment, ̀ 800.00 lakhs (Net) has been reversed (PY ` 500.00 lakhs addition) in the current year. Provision of ` 1,589.27 lakhs (PY ` 120.43 lakhs) has been made towards Non performing assets.
23. During the year, 1,60,00,000 shares of ` 10/- each of STCI Primary Dealer Limited (100% wholly owned subsidiary) were surrendered under buy back scheme @ ` 23.32 per share resulting into exceptional gain of ` 2,131.20 lakhs. The capital investment in STCI Primary Dealer Limited, after the buyback is reduced to ` 15,000.00 lakhs from ` 16,600.00 lakhs.
24. During the year, ` 1,087.69 lakhs were received from Administrator of the Specified Undertaking of Unit Trust of India (SUUTI) on account of arbitration award regarding purchase of UTI Securities. The award amount includes `1,000.00 lakhs towards arbitration award, interest of `82.19 lakhs and reimbursement of expenses of `5.50 lakhs. The entire receipt of `1,087.69 lakhs is accounted as an exceptional income for FY 14-15.
25. Segment Reporting
(a) Business Segment :
The Company’s management has identified Lending Business and Treasury Operations as two reportable segment based on risk, return and the regulatory authorities for reporting.
(b) Segment Revenues and Expenses :
The segmental revenues and expenses include all directly attributable to the respective segment. Administrative expenses, personnel costs and depreciation on fixed assets cannot be identified with any particular segment and are considered as unallocable.
(c) Segment Assets and Liabilities :
The segmental assets and liabilities include all directly attributable to the respective segment. All other assets and liabilities not attributable to any particular segment have been grouped under Unallocated Assets and Liabilities.
(d) Geographical Segment:
The Company does not have geographical segment in the context of the Accounting Standard 17 on Segment Reporting issued by the Institute of Chartered Accountants of India.
NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED MARCH 31, 2015
STCI FINANCE LIMITED
(Formerly known as Securities Trading Corporation of India Limited)
110
The detailed segmental information is as under.
Segment Information Treasury Lending Unallocated Total
Current Year
Previous Year
Current Year
Previous Year
Current Year
Previous Year
Current Year
Previous Year
REVENUES
External Sources/Clients 4,938.13 4,968.99 40,471.36 30,084.42 912.51 252.83 46,322.00 35,306.24
Inter-segment 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Total Revenue 4,938.13 4,968.99 40,471.36 30,084.42 912.51 252.83 46,322.00 35,306.24
Segment Result Profit/(Loss)
2,744.54 2,487.25 15,605.70 13,099.11 18,350.24 15,586.36
Unallocated income net of expenses
(246.91) (884.22)
Operating Profit/(Loss) 18,103.33 14,702.14
Depreciation (164.59) (161.43)
Profit before Tax & exceptional item
17,938.74 14,540.71
Exceptional items 3,218.89 0.00
Profit after exceptional items before tax
21,157.63 14,540.71
Provision/(Write-back) for Direct Taxes including Deferred Tax
5,781.65 5,396.79
Profit/(Loss) after Tax 15,375.98 9,143.92
OTHER INFORMATION
Segment Assets 29,343.37 49,380.66 370,565.18 284,184.78 41,127.55 34,674.86 441,036.10 368,240.30
Segment Liabilities 15,100.96 26,612.88 301,329.54 234,984.54 23,091.67 16,638.05 339,522.17 278,235.47
26. The gratuity liability of the Company’s employees is covered by a Group Gratuity Scheme of the Life Insurance Corporation of India. The disclosure as required by Accounting Standard -15 “Employee Benefits” issued by the Institute of Chartered Accountants of India is as under.
Assumptions 2014‐15 2013‐14
Mortality rate LIC (1994-96) Ult. LIC (1994-96) Ult.Interest / Discount Rate 8.00% 8.00%Rate of return of Plan Assets 8.00% 8.00%Salary Escalation 10.00% 10.00%
NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED MARCH 31, 2015(` in lakhs)
STCI FINANCE LIMITED
(Formerly known as Securities Trading Corporation of India Limited)
111
Particulars 2014‐15 2013‐14
Gratuity Leave Encashment
Gratuity Leave Encashment
Changes in present value of obligationOpening Defined Benefit Obligation 50.14 84.08 45.78 92.09Interest Cost 3.81 6.30 3.48 6.44Current Service Cost 10.45 32.40 10.23 29.32Actuarial (Gains) / Losses (2.53) (5.59) (4.85) (20.57)Benefits Paid (5.09) (10.77) (4.50) (23.20)Closing Defined Benefit Obligation 56.78 106.42 50.14 84.08
Changes in the fair value of plan assetsFair value of plan assets at the beginning of year
39.72 0.00 33.81 0.00
Expected return on plan assets 3.13 0.00 2.82 0.00Contributions 3.86 10.77 7.31 23.20Benefits paid (5.09) (10.77) (4.50) (23.20)Actuarial Gains/ (Losses) 0.46 0.00 0.28 0.00Fair value of plan assets at the end of year 42.08 0.00 39.72 0.00
Fair value of plan assets at the beginning of year
39.72 0.00 33.81 0.00
Actual return on plan assets 3.59 0.00 3.10 0.00Contributions 3.86 10.77 7.31 23.20Benefits paid (5.09) (10.77) (4.50) (23.20)Fair value of plan assets at the end of year 42.08 0.00 39.72 0.00Funded status (14.70) (106.42) (10.42) (84.08)Excess of Actual over estimate return on assets
0.46 0.00 0.28 0.00
Experience HistoryExperience ( Gain)/ Loss on obligation (2.53) (5.59) (4.85) (20.57)Actuarial Gain / (Loss) on plan assets 0.46 0.00 0.28 0.00
NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED MARCH 31, 2015(` in lakhs)
STCI FINANCE LIMITED
(Formerly known as Securities Trading Corporation of India Limited)
112
Particulars 2014‐15 2013‐14Gratuity Leave
EncashmentGratuity Leave
Encashment
Actuarial Gain/ (loss) recognisedActuarial Gain/ (Loss) for the year - obligation
2.53 5.59 4.85 20.57
Actuarial Gain/ (Loss) for the year - plan assets
0.46 0.00 0.28 0.00
Net Actuarial Gain/ (Loss) recognised for the year
2.99 5.59 5.13 20.57
Amount to be recognised in Balance SheetPresent value of obligation as at the end of year
56.78 106.42 50.14 84.08
Fair value of plan assets as at the end of year
42.08 0.00 39.72 0
Funded status (14.70) (106.42) (10.42) (84.08)Unrecognised Past Service Cost (non vested benfefits)
0.00 0.00 0.00 0.00
Net Asset recognised ‐ Prepaid / (provisions)
(14.70) (106.42) (10.42) (84.08)
Expenses Recognised in Profit and Loss accountCurrent Service Cost 10.45 32.40 10.23 29.32Interest Cost 3.81 6.30 3.48 6.44Net Actuarial loss/ (gain) recognised in the year
(2.99) (5.59) (5.13) (20.57)
Expected return on plan assets (3.13) 0.00 (2.82) 0.00Expenses recognised in Profit and Loss Account
8.14 33.11 5.76 15.19
Movement in Liability recongised in Balance SheetOpening Net Liability 10.42 84.08 11.97 92.09Expenses as above 8.14 33.11 5.76 15.19Contribution paid (3.86) (10.77) (7.31) (23.20)Closing Net Liability 14.70 106.42 10.42 84.08
NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED MARCH 31, 2015(` in lakhs)
STCI FINANCE LIMITED
(Formerly known as Securities Trading Corporation of India Limited)
113
Provision of ̀ 2.25 lakhs (Previous year reversal of ̀ 4.43 lakhs) has been made for undiscounted liability on account of short term compensated absences. Total provision as on March 31, 2015 for short term compensated absences is of `24.23 lakhs (Previous year `21.98 lakhs).
27. Effective April 1, 2014, estimated useful life of certain fixed assets has been realigned as per Schedule II of the Companies Act, 2013. Due to this change in the estimated useful life of assets, the depreciation charge for the year is higher by `13.27 lakhs.
The excess depreciation of `13.27 lakhs includes, `6.20 lakhs pertaining to assets whose useful life has been exhausted as on 1st April, 2014 (based on revised estimated life) and the same has been debited to profit and loss account in view of the MCA Notification No G.S.R 627 (E) dated August 29, 2014.
28. Loans and Advances of `127,150.00 lakhs (PY `62,500.00 lakhs) have been charged in favour of Debenture Trustee for outstanding Secured Redeemable Non- Convertible Debentures (NCD’s) of `100,000.00 lakhs (PY `50,000.00 lakhs).
29. CSR Expenses
During the year, Company has spent `208.00 lakhs towards CSR activities in terms of Section 135 of the Companies Act, 2013 and Companies (Corporate Social Responsibility policy) Rules, 2014. Details of CSR expenses for the year are as under.
No. Particulars Amount (` in lakhs)
1 Contribution to Prime Ministers Relief Fund 202.00
2Contribution to other charitable organisations eligible for CSR purpose
06.00
Total CSR Expenses 208.00
30. Disclosures in terms of the provisions of Non‐Banking Financial Companies, Prudential Norms:
a) Capital to Risk Weighted Asset Ratio
Sr. No.
Particulars As at March 31, 2015
As at March 31, 2014
1 CRAR (%) 23.68% 26.56%
2 CRAR – Tier I Capital (%) 23.27% 25.87%
3 CRAR – Tier II Capital (%) 0.41% 0.69%
4 Amount of subordinated debt raised as Tier-II capital
Nil Nil
5 Amount raised by issue of Perpetual Debt Instruments
Nil Nil
NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED MARCH 31, 2015
STCI FINANCE LIMITED
(Formerly known as Securities Trading Corporation of India Limited)
114
b) Investments Sr.
No.Particulars
As atMarch 31, 2015
As atMarch 31, 2014
1 Value of Investments :
(i) Gross Value of Investments
(a) In India 45,383.86 65,259.92
(b) Outside India Nil Nil
(ii) Provisions for Depreciation
(a) In India 260.79 260.79
(b) Outside India Nil Nil
(iii) Net Value of Investments
(a) In India 45,123.07 64,999.13
(b) Outside India Nil Nil
2 Movement of Provisions held towards depreciation on Investments : (i) Opening Balance 260.79 260.79 (ii) Add: Provisions made during the year 0.00 0.00
(iii)Less: Write-off / write-back of excess provisions during the year
0.00 0.00
(iv) Closing balance 260.79 260.79
c) Derivatives
i) Forward Rate Agreements / Interest Rate Swap :
The Company has not entered into any forward rate agreement or interest rate swap during the year. There are no outstanding positions in respect of any forward rate agreement or interest rate swap as on March 31, 2015.
Sr. No.
Particulars As atMarch 31, 2015
As atMarch 31, 2014
(i) The notional principal of swap agreements Nil Nil
(ii) Losses which would be incurred if counter parties failed to fulfil their obligations under the agreements
Nil Nil
(iii) Collateral required by the NBFC upon entering into swaps
Nil Nil
(iv) Concentration of credit risk arising from the swaps
Nil Nil
(v) The fair value of the swap book Nil Nil
NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED MARCH 31, 2015(` in lakhs)
STCI FINANCE LIMITED
(Formerly known as Securities Trading Corporation of India Limited)
115
ii) Exchange Traded Interest Rate (IR) Derivatives :
The Company has not entered into any Exchange Traded Interest Rate (IR) Derivatives during the year and there are no outstanding positions in respect of any Exchange Traded Interest Rate (IR) Derivatives as on March 31, 2015.
Sr. No.
Particulars As atMarch 31, 2015
As atMarch 31, 2014
(i) Notional principal amount of exchange traded IR derivatives undertaken during the year
Nil Nil
(ii) Notional principal amount of exchange traded IR derivatives outstanding
Nil Nil
(iii) Notional principal amount of exchange traded IR derivatives outstanding and not “highly effective”
Nil Nil
(iv) Mark-to-Market value of exchange traded IR derivatives outstanding and not “highly effective”
Nil Nil
iii) Qualitative Disclosure
During the year, Company has not entered into any derivative transactions, except equity derivatives. The equity derivatives transactions entered during the year are primarily for the purpose of hedging cash equity portfolio.
Risk management at operating level has been delegated to ALCO & Risk Management committee and Investment Committee of senior executives of the company. Treasury, Investment and Risk policy of the Company lays down the risk management framework for derivatives trading. The policy also prescribes Risk Identification, its measurement, monitoring and risk mitigants.
iv) Quantitative Disclosure
The company has not entered into any currency or interest rate derivative transactions during the year. There are no outstanding positions in respect of any Currency Derivatives or Interest Rate Derivatives as on March 31, 2015.
Sr. No.
Particular Currency Derivatives
Interest Rate Derivatives
(i) Derivatives (Notional Principal Amount)
For hedging Nil Nil
(ii) Marked to Market Positions
a) Asset (+) Nil Nil
b) Liability (-) Nil Nil
(iii) Credit Exposure Nil Nil
(iv) Unhedged Exposure Nil Nil
NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED MARCH 31, 2015(` in lakhs)
STCI FINANCE LIMITED
(Formerly known as Securities Trading Corporation of India Limited)
116
d) Disclosure relating to Securitisation :
i) During the year, Company has not securitized any of its assets and does not have any outstanding position in respect thereof as on March 31, 2015.
ii) Company has not sold any of its financial assets to Securitisation/Reconstruction Company for Asset Reconstruction.
iii) Company has not undertaken any assignment transaction during the year.
iv) Company has neither purchased nor sold any non-performing financial assets during the year and does not have any outstanding position in respect thereof as on March 31, 2015.
e) Asset Liability Management Maturity pattern of certain items of assets and liabilities
Upto 30/31 days
Over 1 month upto
2 month
Over 2month
upto3month
Over 3 month upto
6 month
Over 6month
to 1 year
Over 1 year upto 3 years
Over 3 years Upto
5 years
Over 5 Years
Total
As at March 31, 2015
Assets
Deposits Nil Nil Nil Nil Nil Nil Nil Nil Nil
Advances 8,002.00 8,358.33 46,470.92 94,754.33 68,796.73 115,881.46 21,440.33 1,892.75 365,596.85
Investments 158.70 0.00 3,878.06 0.00 0.00 1,543.69 0.00 39,542.62 45,123.07
Liabilities
Bank Borrowings 0.00 9,500.00 0.00 0.00 69,127.70 0.00 0.00 0.00 78,627.70
Market borrowings 15,000.00 7,500.00 5,000.00 49,000.00 83,500.00 20,000.00 50,000.00 0.00 230,000.00
Foreign Currency :
Foreign Currency Assets Nil Nil Nil Nil Nil Nil Nil Nil Nil
Foreign Currency Liabilities
Nil Nil Nil Nil Nil Nil Nil Nil Nil
As at March 31, 2014
Assets
Deposits Nil Nil Nil Nil Nil Nil Nil Nil Nil
Advances 15,165.74 7,125.00 9,175.30 57,106.43 98,221.07 87,034.74 6,697.08 0.00 280,525.38
Investments 1,600.04 0.00 0.00 995.40 0.00 6,216.71 0.00 56,186.98 64,999.13
Liabilities
Bank Borrowings 0.00 0.00 0.00 10,000.00 74,634.09 0.00 0.00 0.00 84,634.09
Market borrowings 26,550.00 36,700.00 25,000.00 15,500.00 20,000.00 50,000.00 0.00 0.00 173,750.00
Foreign Currency :
Foreign Currency Assets Nil Nil Nil Nil Nil Nil Nil Nil Nil
Foreign Currency Liabilities
Nil Nil Nil Nil Nil Nil Nil Nil Nil
NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED MARCH 31, 2015(` in lakhs)
STCI FINANCE LIMITED
(Formerly known as Securities Trading Corporation of India Limited)
117
f) Exposures
i) Exposure to Real Estate Sector :
Category As at March 31, 2015
As at March 31, 2014
Direct Exposure*
1 Residential Mortgages
Lending fully secured by mortgages on residential property that is or will be occupied by the borrower or that is rented;
9,722.63 5,794.31
2 Commercial Real Estate
Lending secured by mortgages on commercial real estates (office buildings, retail space, multipurpose commercial premises, multi-family residential buildings, multi-tenanted commercial premises, industrial or warehouse space, hotels, land acquisition, development and construction etc.) including non-fund based (NFB) limits
66,769.45 29,226.51
3 Investments in Mortgage Backed Securities (MBS) and other securitised exposures
a Residential Nil Nil
b Commercial Real Estate Nil Nil
Indirect Exposure
Fund based and non-fund based exposures on National Housing Bank (NHB) and Housing Finance Companies (HFCs).
Nil 938.30
*Direct exposure to real estate sector is taken as exposure to finance acquisition / construction of commercial/residential real estate and where the repayment is expected to be made out of the realisation of financed real estate assets.
NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED MARCH 31, 2015(` in lakhs)
STCI FINANCE LIMITED
(Formerly known as Securities Trading Corporation of India Limited)
118
NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED MARCH 31, 2015(` in lakhs)
ii) Exposure to Capital Market
Particulars As at March 31, 2015
As at March 31, 2014
1 Direct investment in equity shares, convertible bonds, convertible debentures and units of equity-oriented mutual funds the corpus of which is not exclusively invested in corporate debt:
16,755.09 19,295.22
2 Advances against shares / bonds / debentures or other securities or on clean basis to individuals for investment in shares (including IPOs / ESOPs), convertible bonds, convertible debentures, and units of equity-oriented mutual funds:
12,744.46 18,789.96
3 Advances for any other purpose where shares or convertible bonds or convertible debentures or units of equity oriented mutual funds are taken as primary security
264,585.71 214,228.67
4 Advances for any other purposes to the extent secured by the collateral security of shares or convertible bonds or convertible debentures or units of equity oriented mutual funds ie where the primary security other than shares / convertible bonds / convertible debentures / units of equity oriented mutual funds does not fully cover the advances:
Nil Nil
5 Secured and unsecured advances to stockbrokers and guarantees issued on behalf of stockbrokers and market makers:
1,000.01 1,518.15
6 Loans sanctioned to corporate against the security of shares / bonds / debentures or other securities or on clean basis for meeting promoter’s contribution to the equity of new companies in anticipation of raising resources:
Nil Nil
7 Bridge loans to companies against expected equity flows / issues;
Nil Nil
8 All exposures to venture capital funds (both registered and unregistered)
1,803.03 1,320.51
Total Exposure to Capital Market 296,888.30 255,152.51
STCI FINANCE LIMITED
(Formerly known as Securities Trading Corporation of India Limited)
119
NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED MARCH 31, 2015(` in lakhs)
iii) Details of financing of parent company product – Not Applicable
iv) Company has not exceeded prudential Single Borrower Limit (SGL)/Group Borrower Limit (GBL) during the year.
g) Miscellaneous
i) Registration / license / authorisation obtained from financial sector regulators
RBI – Certificate of Registration bearing No B-13.00005, dated December 16th, 1997
MCA – Certificate of Incorporation No. 11-78303 dated May 10th, 1994
Corporate Identity No. - U51900MH1994PLC078303
ii) Disclosure of Penalties imposed by RBI and other regulator: Nil (PY –Nil)
iii) Ratings assigned by credit rating agencies and migration of ratings during the year;
Rating Agencies
Short Term Debt Long Term Debt (NCD)
Long Term Bank Lines
Rating Amount Rating Amount Rating AmountICRA A1+ 150,000.00 AA 120,000.00 AA 20,000.00CARE - - AA 120,000.00 - -CRISIL A1+ 200,000.00 - - -
iv) Information viz., area, country of operation and joint venture partners with regard to Joint Ventures and Overseas Subsidiaries:
Company operates primarily through its Head Office in Mumbai and has a branch office in New Delhi. Company does not have any overseas presence either through its branches or by way of any joint venture or overseas subsidiaries.
h) Additional Disclosures
i) Information on all provisions and contingencies booked as expenditure in Profit and Loss Account
Particulars 2014‐15 2013‐14
Provision for depreciation on Investment/stock-in-trade 1.95 29.40Provision for amortisation on Investment 38.08 20.62Provision towards NPA 1,589.27 120.43Provision for Standard Assets (515.71) 879.15Provision made towards Income Tax 5,781.65 5,396.79Other Provision and Contingencies (employee related) 200.00 200.00
STCI FINANCE LIMITED
(Formerly known as Securities Trading Corporation of India Limited)
120
NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED MARCH 31, 2015(` in lakhs)
ii) Concentration of Advances, Exposures and NPAs
a) Concentration of Advances/Exposures
Particulars 2014‐15 2013‐14
Total Advances to twenty largest borrowers/ customers 162,154.23 133,265.31% of Advances to twenty largest borrowers to total advances of the NBFC
44.35% 47.51%
d) Concentration of NPAs
Particulars 2014‐15 2013‐14Total Exposure to top four NPA accounts 14,000.00 3,097.08
c) Sector‐wise NPAs
Sr No.
Sector Percentage of NPAs to Total Advances in that sector2014‐15 2013‐14
1 Agriculture & Allied activities - -2 MSME - -3 Corporate borrowers (includes LLP and
partnership firms/Trusts)4.17% 0.74%
4 Services - -5 Unsecured personal loans - -6 Auto loans - -7 Other personal loans - -8 Others (Individual Borrowers) 13.47% 4.68%
iii) Movement of NPAs
No. Particulars 2014‐15 2013‐14(i) Net NPAs to Net Advances (%) 4.09% 0.88%(ii) Movement of NPAs (Gross)
(a) Opening balance 3,097.08 5,130.75(b) Additions during the year 14,530.21 1,204.33(c)’ Reductions during the year (530.21) (3,238.00)(d) Closing balance 17,097.08 3,097.08
(iii) Movement of NPAs (Net)(a) Opening balance 2,463.57 4,617.67(b) Additions during the year 12,887.92 1,083.90(c)’ Reductions during the year (477.19) (3,238.00)(d) Closing balance 14,874.30 2,463.57
STCI FINANCE LIMITED
(Formerly known as Securities Trading Corporation of India Limited)
121
NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED MARCH 31, 2015(` in lakhs)
(iv) Movement of provisions for NPAs (excluding provisions on standard assets)(a) Opening balance 633.51 513.08(b) provisions during the year 1,642.29 120.43(c) Write-off / write-back of excess provisions (53.02) (0.00)(d) Closing balance 2,222.78 633.51
iv) Company does not have any overseas assets.
v) Company does not have any off balance sheet sponsored SPV’s.
i) Customer Complaints
No. Particulars 2014‐15 2013‐14
(a) No. of complaints pending at the beginning of the year Nil Nil(b) No. of complaints received during the year Nil Nil(c)’ No. of complaints redressed during the year Nil Nil(d) No. of complaints pending at the end of the year Nil Nil
j) Other Disclosure : (` in lakhs)
Sr No.
Particulars Amount Outstanding Amount Overdue
As at 31.3.2015
As at 31.3.2014
As at 31.3.2015
As at 31.3.2014
Liabilities Side
1
Loans and advances availed by the NBFC inclusive
of interest accrued thereon but not paid:
(a) Debenture
Secured 104,381.40 50,828.27 Nil Nil
Unsecured Nil Nil Nil Nil(other than falling within the meaning of Public deposit)
(b) Deferred Credit Nil Nil Nil Nil
(c) Term Loans 39,519.72 40,020.56 Nil Nil
(d) Inter Corporate Loans and Borrowing Nil Nil Nil Nil
(e) Commercial Paper 115,000.00 97,200.00 Nil Nil
(f) Others Loans (Working Capital Demand Loan/CBLO) 54,169.03 71,223.53 Nil Nil
Assets Side Amount Outstanding
2014‐15 (` in lakhs)
Amount Outstanding
2013‐14 (` in lakhs)2
Break‐up of Loans and Advances including bills receivables (other than those included in (4) below): (for fin acing business of the company)
(a) Secured (Gross) 357,313.35 276,415.16(b) Unsecured 8,283.50 4,110.22
STCI FINANCE LIMITED
(Formerly known as Securities Trading Corporation of India Limited)
122
Sr No.
Particulars Amount Outstanding Amount Outstanding
2014‐15 (` in lakhs) 2013‐14 (` in lakhs)3
Break up Leased Assets and stock on hire and and other assets counting towards AFC activities (i) Lease assets including lease rentals under sundry debtors
(a) Finance Lease Nil Nil(b) Operating Lease Nil Nil (ii)Stock on hire including hire charges under sundry debtor
(a) Assets on hire Nil Nil (b) Repossessed Assets Nil Nil (iii) Other loans counting towards AFC activities (a) loans where assets have been repossessed Nil Nil (b) loans other than (a) above Nil Nil
4 Break‐up of Investments
Current Investment
1. Quoted
(i) Shares : (a) Equity 99.46 244.62
(b) Preference Nil Nil
(ii) Debentures and Bonds 3,896.81 995.40
(iii) Units of mutual funds Nil Nil
(iv) Government Securities 40.49 1,355.42
(v) others Nil Nil
2. Unquoted
(i) Shares : (a) Equity Nil Nil
(b) Preference Nil Nil
(ii) Debentures and Bonds Nil Nil
(iii) Units of mutual funds Nil Nil
(iv) Government Securities Nil Nil
(v) others Nil Nil
Long Term Investments
1. Quoted
(i) Shares : (a) Equity 1,029.49 1,824.46
(b) Preference Nil Nil
(ii) Debentures and Bonds 514.20 5,330.56
(iii) Units of mutual funds Nil Nil
(iv) Government Securities 22,113.44 36,702.01
(v) others (Please specify) Nil Nil
NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED MARCH 31, 2015(` in lakhs)
STCI FINANCE LIMITED
(Formerly known as Securities Trading Corporation of India Limited)
123
Sr. No.
Particulars Amount Outstanding Amount Outstanding
2014‐15 (` in lakhs) 2013‐14 (` in lakhs)
2. Unquoted (i) Shares : (a) Equity 15,626.15 17,226.15 (b) Preference Nil Nil(ii) Debentures and Bonds Nil Nil(iii) Units of mutual funds Nil Nil(iv) Government Securities Nil Nil(v) others (Venture Capital Fund) 1,803.03 1,320.51
45,123.07 64,999.13
5
Borrower group‐wise classification of assets financed as in (2) and (3) above
Category Amount Net of Provisions
Secured Unsecured Total1. Related Parties (a) Subsidiaries Nil Nil Nil(b) Companies in the same group Nil Nil Nil(c) other related parties Nil Nil Nil2. Other than related parties 355,339.42 8,034.64 363,374.06Total 355,339.42 8,034.64 363,374.06
6
Investor group‐wise classification of all Investments (current & long‐term) in shares and securities (quoted & unquoted)
Category Market Value Book Value
2014‐15 2013‐14 2014‐15 2013‐14
1. Related Parties (a) Subsidiaries 15,126.15 16,726.15 15,126.15 16,726.15(b) Companies in the same group Nil Nil Nil Nil(c) other related parties Nil Nil Nil Nil2. Other than related parties 29,910.13 44,925.43 29,996.92 48,272.98Total 45,036.28 61,651.58 45,123.07 64,999.13
Sl. Particulars 2014‐15 (` in lakhs)
2013‐14 (` in lakhs)
7 Other Information Particulars
(i) Gross Non Performing Assets (a) Related parties Nil Nil (b) Other than related parties 17,097.08 3,097.08
(ii) Net Non-Performing Assets (a) Related parties Nil Nil (b) Other than related parties 14,874.30 2,463.57
(iii) Assets acquired in satisfaction of Debts Nil Nil
NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED MARCH 31, 2015(` in lakhs)
STCI FINANCE LIMITED
(Formerly known as Securities Trading Corporation of India Limited)
124
31. Previous year’s figures have been regrouped/rearranged wherever necessary. Figures are rounded off to the nearest lakh Rupees. As a result, adjustments have been made in the last decimals in the individual heads of certain accounts to avoid differences caused by rounding off of these figures as compared to totals and sub-totals.
NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED MARCH 31, 2015(` in lakhs)
As per our report of even date
For and on behalf ofA. J. Shah & Co.Chartered Accountants Firm Registration No. 109477W
Devendra J. Shrimanker Partner Membership No. 41920
Mumbai April 28, 2015
On behalf of the Board of Directors
Mrs. V.R. Iyer Chairperson
T.C. Venkat Subramanian Director
S. Ravi Director
S. Venkateswarlu Managing Director
Kamlesh Rathi Chief Financial Officer
Suparna Sharma Company Secretary
MumbaiApril 28, 2015
STCI FINANCE LIMITED
(Formerly known as Securities Trading Corporation of India Limited)
125
CASH FLOW STATEMENT FOR THE YEAR ENDED MARCH 31, 2015(` in lakhs)
Particulars For the year endedMarch 31, 2015
For the year endedMarch 31, 2014
A. CASH FLOW FROM OPERATING ACTIVITIES
Net (Loss) / Profit before tax and extraordinary items 21,157.63 14,540.71
Adjustments for:
Depreciation 164.59 161.43
(Profit) / Loss on sale of fixed assets (0.23) 1.23
(Profit) / Loss on sale of Investments (3,152.41) (342.14)
Interest and other income on investments (3,651.19) (3,628.64)
Provision for Wealth Tax 5.81 5.88
Dividend on investments (193.51) (112.08)
Amortisation of premium on investments 38.08 20.62
Provision against loans and advances 1,073.56 999.58
(5,715.30) (2,894.12)
Operating Profit / (loss) before working capital changes 15,442.33 11,646.59
Changes in Working Capital:
Increase / (Decrease) in trade payable 25.73 (2.98)
Increase / (Decrease) in provisions (27.93) 25.51
Increase / (Decrease) in other current liabilities 5,067.17 (782.69)
(Increase) / Decrease in long term loan and advances (45,483.05) (37,830.62)
(Increase) / Decrease in other non current assets 758.66 (625.00)
(Increase) / Decrease in short term loan and advances (39,598.72) (55,049.34)
(Increase) / Decrease in trade receivables 276.94 (252.10)
(Increase) / Decrease in inventories 1,441.34 3,455.05
(Increase) / Decrease in other current assets (3,250.10) 982.95
(80,789.96) (90,079.22)
CASH FLOW FROM / (USED IN) OPERATING ACTIVITIES (65,347.63) (78,432.63)
Less: Taxes Paid (6,787.86) (4,329.63)
NET CASH FLOW FROM / (USED IN) OPERATING ACTIVITIES (72,135.49) (82,762.26)
B. CASH FLOW FROM INVESTING ACTIVITIES
Purchase of tangible / intangible assets (7.87) (23.49)
STCI FINANCE LIMITED
(Formerly known as Securities Trading Corporation of India Limited)
126
CASH FLOW STATEMENT FOR THE YEAR ENDED MARCH 31, 2015(` in lakhs)
Particulars For the year endedMarch 31, 2015
For the year endedMarch 31, 2014
Sale of tangible / intangible assets 0.23 5.46
Purchase of investments (6,419.98) (17,265.75)
Sale of investments 28,007.12 25,095.64
Dividend received 193.51 112.08
Interest received 3,651.19 3,628.64
NET CASH FLOW FROM / (USED IN) INVESTING ACTIVITIES 25,424.20 11,552.58
C. CASH FLOW FROM FINANCING ACTIVITIES
Payment of Dividend (including DDT) (3,556.65) (3,556.65)
Funds borrowed 50,243.61 75,079.08
CSR Expenses (208.00) 0.00
NET CASH FLOW FROM / (USED IN) FINANCING ACTIVITIES 46,478.96 71,522.43
NET INCREASE / (DECREASE) IN CASH & CASH EQUIVALENTS (A+B+C)
(232.33) 312.75
Cash and Cash equivalents at beginning of period 2,126.81 1,814.06
Cash and Cash equivalents at end of period 1,894.48 2,126.81
Prepared as per "Indirect Method" as prescribed by Accounting Standard -3 (revised) "Cash Flow Statements"
As per our attached report of even date
For and on behalf ofA. J. Shah & Co.Chartered Accountants Firm Registration No. 109477W
Devendra J. Shrimanker Partner Membership No. 41920
Mumbai April 28, 2015
On behalf of the Board of Directors
Mrs. V.R. Iyer Chairperson
T.C. Venkat Subramanian Director
S. Ravi Director
S. Venkateswarlu Managing Director
Kamlesh Rathi Chief Financial Officer
Suparna Sharma Company Secretary
MumbaiApril 28, 2015
STCI FINANCE LIMITED
(Formerly known as Securities Trading Corporation of India Limited)
127
Form AOC ‐ I(Statement Pursuant to first proviso to sub‐section (3) of section 129 read with rule 5 of Companies (Accounts) Rules, 2014) containing salient features of the
financial statement of subsidiaries/associate companies/joint venturesPart “A”: Subsidiaries
(` in lakhs)
Name of the subsidiary STCI Primary Dealer Limited STCI Commodities Limited
Reporting period for the subsidiary 31-Mar-15 31-Mar-15Reporting currency and Exchange rate as on the last date of the relevant Financial year in the case of foreign subsidiaries
Not Applicable Not Applicable
Share capital 15,000.00 * 450.00 Reserves & surplus 20,999.49 (314.03)Total Assets 427,435.69 146.45 Total Liabilities 391,436.18 10.48 Investments 377,433.47 6.20 Turnover / Revenue 41,328.59 9.74 Profit before taxation 13,160.83 7.30 Provision for taxation 5,093.31 0.66 Profit after taxation 8,067.52 (3.54)Proposed Dividend Nil Nil% of shareholding 100.00% 100.00%Names of subsidiaries which are yet to commence operations Not ApplicableNames of subsidiaries which have been liquidated or sold during the year Not Applicable* Shares bought back during the year of `1600 lakhs
Part “B”: Associates and Joint Ventures ‐ Not Applicable
As per our report of even date
For and on behalf ofA. J. Shah & Co.Chartered Accountants Firm Registration No. 109477W
Devendra J. Shrimanker Partner Membership No. 41920
Mumbai April 28, 2015
On behalf of the Board of Directors
Mrs. V.R. Iyer Chairperson
T.C. Venkat Subramanian Director
S. Ravi Director
S. Venkateswarlu Managing Director
Kamlesh Rathi Chief Financial Officer
Suparna Sharma Company Secretary
MumbaiApril 28, 2015
STCI FINANCE LIMITED
(Formerly known as Securities Trading Corporation of India Limited)
128
LIST OF SHAREHOLDERS AND SHAREHOLDING PATTERN AS ON 31.03.2015Sr.
No.Name of the Shareholders No. of Shares
held% Held
1 Bank of India 11383781 29.962 IDFC Limited 3530136 9.293 State Bank of India 2812415 7.404 IDBI Bank Limited 2507610 6.605 Punjab National Bank 1877564 4.946 Life Insurance Corporation of India 1505400 3.967 Canara Bank 1426298 3.75
8 ICICI Bank Limited 1400528 3.69
9 Bank of Baroda 1253544 3.3010 Central Bank of India 1150100 3.0311 Indian Bank 1102378 2.9012 Dena Bank 646947 1.7013 Allahabad Bank 622134 1.6414 Syndicate Bank 582160 1.5315 Union Bank of India 581248 1.5316 Administrator of the specified undertaking of the Unit Trust
of India-DRF494043 1.30
17 Oriental Bank of Commerce 474277 1.2518 UCO Bank 464892 1.2219 General Insurance Corporation of India 432875 1.14
20 United Bank of India 378256 0.99
21 The New India Assurance Company Limited 368175 0.9722 IFCI Limited 337400 0.8923 Andhra Bank 313196 0.8224 State Bank of Hyderabad 268052 0.7125 Bank of Maharashtra 265032 0.7026 Indian Overseas Bank 254078 0.6727 State Bank of Travancore(AFS) 248519 0.6528 Punjab and Sind Bank 225500 0.5929 State Bank of Bikaner and Jaipur 223896 0.59
30 Corporation Bank 209461 0.5531 State Bank of Patiala 200616 0.5332 State Bank of Mysore 167644 0.4433 The Oriental Insurance Company Limited 137290 0.36
34 SIDBI Venture Capital Limited 82045 0.2235 National Insurance Company Limited 72510 0.19
Total 38000000 100.00
STCI FINANCE LIMITED
CONSOLIDATED ACCOUNTS
Annual Report For The Year Ended
31st March, 2015
STCI FINANCE LIMITED
(Formerly known as Securities Trading Corporation of India Limited)
130
STCI FINANCE LIMITED
(Formerly known as Securities Trading Corporation of India Limited)
131
01 Auditors’ Report 132
02 Consolidated Balance Sheet 137
03 ConsolidatedProfit&LossAccount 139
04 Notes to Consolidated Financial Statements 141
05 SignificantAccountingPolicies 162
06 NotesFormingPartofconsolidatedFinancialStatements 171
07 Consolidated Cash Flow Statement 181
Contents
II. CONSOLIDATED ACCOUNTS
STCI FINANCE LIMITED
(Formerly known as Securities Trading Corporation of India Limited)
132
Report on the Consolidated Financial Statements
WehaveauditedtheaccompanyingconsolidatedfinancialstatementsofSTCIFinanceLimited(the“HoldingCompany”)anditssubsidiaries;(hereinafterreferredtoas“theGroup”)whichcomprisetheconsolidatedBalanceSheetasatMarch31,2015,theconsolidatedStatementofProfitandLossandtheconsolidatedCashFlowStatementfortheyearthenendedandasummaryofsignificantaccountingpoliciesandotherexplanatoryinformationoftheconsolidatedfinancialstatements.
Management’s Responsibility for the Consolidated Financial Statements
TheHoldingCompany’sBoardofDirectorsisresponsibleforthepreparationoftheseconsolidatedfinancialstatementsintermsoftherequirementsoftheCompaniesAct2013(“theAct”)thatgiveatrueandfairviewoftheconsolidatedfinancialposition,consolidatedfinancialperformanceandconsolidatedcashflowsoftheGroup inaccordancewiththeaccountingprinciplesgenerallyaccepted in India, includingtheAccountingStandards specified under section 133 of the Act, readwith Rule 7 of the Companies (Accounts) Rules,2014.TherespectiveBoardofDirectorsofthecompaniesincludedintheGroupentitiesareresponsibleformaintenanceofadequateaccountingrecordsinaccordancewiththeprovisionsoftheActforsafeguardingtheassetsoftheGroupandforpreventinganddetectingfraudsandotherirregularities;theselectionandapplicationofappropriateaccountingpolicies;making judgmentsandestimates thatare reasonableandprudent;andthedesign,implementationandmaintenanceofadequateinternalfinancialcontrols,thatwereoperatingeffectivelyforensuringtheaccuracyandcompletenessoftheaccountingrecords,relevanttothepreparationandpresentationofthefinancialstatements.thatgiveatrueandfairviewandarefreefrommaterialmisstatement,whetherduetofraudorerror,whichhavebeenusedforthepurposeofpreparationoftheconsolidatedfinancialstatementsbytheDirectorsoftheHoldingCompany,asaforesaid.
Auditor’s Responsibility
Ourresponsibilityistoexpressanopinionontheseconsolidatedfinancialstatementsbasedonouraudit.Whileconductingtheaudit,wehavetakenintoaccounttheprovisionsoftheAct,theaccountingandauditingstandardsandmatterswhicharerequiredtobeincludedintheauditreportundertheprovisionsoftheActandtheRulesmadethereunder.
WeconductedourauditinaccordancewiththeStandardsonAuditingspecifiedunderSection143(10)oftheAct.ThoseStandardsrequirethatwecomplywithethicalrequirementsandplanandperformtheaudittoobtainreasonableassuranceaboutwhethertheconsolidatedfinancialstatementsarefreefrommaterialmisstatement.
Anauditinvolvesperformingprocedurestoobtainauditevidenceabouttheamountsanddisclosuresintheconsolidatedfinancialstatements.Theproceduresselecteddependontheauditor’sjudgement,includingtheassessmentoftherisksofmaterialmisstatementoftheconsolidatedfinancialstatements,whetherduetofraudorerror.Inmakingthoseriskassessments,theauditorconsidersinternalfinancialcontrolrelevanttotheHoldingCompany’spreparationoftheconsolidatedfinancialstatementsthatgiveatrueandfairviewinordertodesignauditproceduresthatareappropriateinthecircumstances,butnotforthepurposeofexpressinganopiniononwhethertheHoldingCompanyhasanadequateinternalfinancialcontrolssystemoverfinancialreportinginplaceandtheoperatingeffectivenessofsuchcontrols.
INDEPENDENT AUDITORS’ REPORT TO THE MEMBERS OF STCI FINANCE LIMITED (FORMERLY KNOWN AS SECURITIES TRADING CORPORATION OF INDIA LIMITED)
STCI FINANCE LIMITED
(Formerly known as Securities Trading Corporation of India Limited)
133
AnauditalsoincludesevaluatingtheappropriatenessofaccountingpoliciesusedandthereasonablenessoftheaccountingestimatesmadebyHoldingCompany’sBoardofDirectors,as,wellasevaluatingtheoverallpresentationoftheconsolidatedfinancialstatements.
We believe that the audit evidence obtained by us and the audit evidence obtained by the other auditors in termsoftheirreportsreferredtoinsub-paragraph(a)oftheOtherMattersparagraphbelow,issufficientandappropriatetoprovideabasisforourauditopinionon.theconsolidatedfinancialstatements.
Opinion
WereportthattheconsolidatedfinancialstatementshavebeenpreparedbytheCompany’sManagementinaccordancewiththerequirementsofAccountingStandard(AS)21-ConsolidatedFinancialStatements,asspecifiedunderSection133oftheAct,readwithRule7oftheCompanies(Accounts)Rules,2014.
Inouropinion,andtothebestofourinformationandaccordingtotheexplanationsgiventous,andbasedontheconsiderationofreportsoftheotherauditorsonthefinancialstatementsofthesubsidiariesasnotedbelow,theaforesaidconsolidatedfinancialstatementsgivetheinformationrequiredbytheActinthemannersorequiredandgiveatrueandfairviewinconformitywiththeaccountingprinciplesgenerallyacceptedinIndia,ofthestateofaffairsoftheGroupasatMarch31,2015anditsconsolidatedprofitanditsconsolidatedcashflowsfortheyearendedonthatdate.
Other Matter
Wedidnotauditthefinancialstatementsofthesubsidiaries,whosefinancialstatementsreflecttotalassetsof Rs. 4,27,582.14 Lakhs as at 31stMarch 2015, the total revenue of Rs. 41,338.33 Lakhs and net cashoutflowsamountingtoRs.5,988.08Lakhsfortheyearthenendedasconsideredintheconsolidatedfinancialstatements.Thesefinancialstatementsandotherfinancialinformationhavebeenauditedbyotherauditorswhosereportshavebeenfurnishedtousbythemanagement,andouropinionontheconsolidatedfinancialstatementsinsofarasitrelatestotheamountsanddisclosuresincludedinrespectofthesesubsidiaries,andourreportintermsofsub-sections(3)and(11)ofSection143oftheAct,insofarasitrelatestotheaforesaidsubsidiaries,isbasedsolelyonthereportsoftheotherauditors.
Our opinion on the consolidated financial statements, and our report on Other Legal and RegulatoryRequirementsbelow, isnotmodified inrespectoftheabovematterswithrespecttoourrelianceontheworkdoneandthereportsoftheotherauditorsandthefinancialstatements/financialinformationcertifiedbytheManagement.
Forandonbehalfof A .J. Shah & Co.
Chartered Accountants FirmRegistrationNo.:109477W
April 28, 2015 Devendra J. Shrimanker Mumbai Partner MembershipNo.:41920
INDEPENDENT AUDITORS’ REPORT TO THE MEMBERS OF STCI FINANCE LIMITED (FORMERLY KNOWN AS SECURITIES TRADING CORPORATION OF INDIA LIMITED)
STCI FINANCE LIMITED
(Formerly known as Securities Trading Corporation of India Limited)
134
SUPPLEMENTARY AUDIT REPORTIssued in continuation to our Audit Report dated April 28, 2015 for the Consolidated Financial Statements and should be read along with that.
INDEPENDENT AUDITORS’ REPORT
THE MEMBERS STCI Finance Limited (formerly known as Securities Trading Corporation of India Limited)
Report on other legal and regulatory requirements
1. Asrequiredbysection143(5)oftheActandinpursuanceofdirectionsreferredtointheletterdatedApril22,2015issuedbytheOfficeoftheComptrollerandAuditorGeneral(C&AG)ofIndiafortheyearendedMarch31,2015,wereportthat:
i. Accordingtotheinformationandexplanationsgiventous,theCompanyhasnotbeenselectedfordisinvestment.
ii. Accordingtotheinformationandexplanationsgiventous,therearenocasesofwaiver/writeoffofdebts/loans/interestetc.forthefinancialyear2014-15.
iii. According to the information & explanation given to us, the Company does not have anyinventorieslyingwiththirdparties&assetsreceivedasgiftfromGovt.orotherauthorities.
iv. Accordingtotheinformation&explanationgiventous,thelistofthependinglegal/arbitrationcasesontheCompanyforfinancialyear2014-15isenumeratedinAnnexureI.Further,thereexistsaneffectivemonitoringmechanismforexpenditureonalllegalcases.
Theinformationanddisclosuresrelatedtosubsidiariescompanies,includedinthissupplementaryauditreport,hasnotbeenauditedbyusandisbasedonthestatutoryauditors’certificatesofthesecompanies.
Forandonbehalfof A .J. Shah & Co.
Chartered Accountants FirmRegistrationNo.:109477W
July 30, 2015 Devendra J. Shrimanker Mumbai Partner MembershipNo.:41920
STCI FINANCE LIMITED
(Formerly known as Securities Trading Corporation of India Limited)
135
Annexure I - Referred to in paragraph 1(iv) under “Report on other legal and regulatory requirements” of our report of even date List of legal/arbitration cases pending for STCI Finance Limited
Disputed legal Dpputed by Last 1 year 1-3 year beyond 3 years Reasons for pendency
No. of Cases
Amt Involved
(` In Lacs)
No. of Cases
Amt Involved
(` In Lacs)
No. of Cases
Amt Involved
(` In Lacs)
IncomeTaxMatters
STCIFinanceLtd 4 485.67 5 280.67 0 0 Appeal filedandawaitinghearing/hearing in process
IncomeTaxMatters
ITDepartment 1 20.15 2 35.14 3 425.19
LegalcasesunderNegotiableinstruments Act
STCIFinanceLtd 0 0 13 3309.82 1 150
Monetary Suit STCIFinanceLtd 1 872.67 0 0 0 0CasefiledunderCivil ProcedureCodesforrecoveryofdues
STCICommoditiesLimited
0 0 0 0 1 17.36
CasefiledunderArbitrationandConciliationAct,1996
ClientofSTCICommoditiesLimited
0 0 0 0 1* 62.41
*STCICommodityhasfiledanapplicationinMumbaiHighCourtforExecutionofArbitrationAwardagainstthe clients,inthesamematter.
Forandonbehalfof A. J. Shah & Co.
Chartered Accountants FirmRegistrationNo.:109477W
July 30, 2015 Devendra J. Shrimanker Mumbai Partner MembershipNo.:41920
STCI FINANCE LIMITED
(Formerly known as Securities Trading Corporation of India Limited)
136
COMMENTS OF THE COMPTROLLER AND AUDITOR GENERAL OF INDIA UNDER SECTION 143(6) (b) READ WITH SECTION 129 (4) OF THE COMPANIES ACT, 2013 ON THE CONSOLIDATED FINANCIAL STATEMENTS OF STCI FINANCE LIMITED FOR THE YEAR ENDED 31 MARCH 2015
ThepreparationofconsolidatedfinancialstatementsofSTCIFinanceLimitedfortheyearended31March2015 inaccordancewith thefinancial reporting frameworkprescribedunder theCompaniesAct,2013 isthe responsibility of themanagement of the company. The statutory auditor/auditors appointed by theComptrollerandAuditorGeneralof Indiaundersection139(5)readwithsection129(4)oftheAct is/areresponsibleforexpressingopiniononthefinancialstatementsundersection143readwithsection129(4)oftheActbasedonindependentauditinaccordancewiththestandardsonauditingprescribedundersection143(10)oftheAct.ThisisstatedtohavebeendonebythemvidetheirAuditReportdated28thApril2015/30July2015.
The subsidiary companies of STCI Finance Ltd., viz. STCI PrimaryDealer Ltd. and STCl Commodities Ltd.,thoughrequiredundertheCompaniesAct2013,hadneitherapproachedthisofficeforappointmentoftheirStatutoryauditornor forsupplementaryauditundersection139(5)and143(6)(b)of theCompaniesAct.2013respectively.AccordinglyC&AGhasnotappointedtheStatutoryAuditorsnorconductedtheStatutoryauditofSTCIPrimaryDealerLtd.andSTCICommoditiesLtd.
I,onbehalfoftheComptrollerandAuditorGeneralofIndia,havedecidednottoconductthesupplementaryauditoftheconsolidatedfinancialstatementsofSTCIFinanceLimitedfortheyearended31March2015andassuchhavenocommentstomakeundersection143(6)(b)readwithsection129(4)oftheAct.
ForandonbehalfoftheComptrollerandAuditorGeneralofIndia
(Roop Rashi)PrincipalDirectorofCommercialAuditandex-officioMember,AuditBoard-I,Mumbai
Place:MumbaiDate:31.07.2015
STCI FINANCE LIMITED
(Formerly known as Securities Trading Corporation of India Limited)
137
CONSOLIDATED BALANCE SHEET AS AT MARCH 31, 2015(`inlakhs)
Particulars NoteNo.
As at March 31, 2015
As at March 31, 2014
I EQUITY AND LIABILITIES
1 Shareholders' Funds
(a)Sharecapital 1.1 38,000.00 38,000.00
(b)Reservesandsurplus 1.2 84,523.26 67,173.06
Sub-Total - (1) 122,523.26 105,173.06
2 Non Current Liabilities
(a)Longtermborrowings 2.1 70,000.00 50,000.00
(b)Longtermprovisions 2.2 19,761.49 13,268.09
Sub-Total - (2) 89,761.49 63,268.09
3 Current Liabilities
(a)Shorttermborrowings 3.1 589,016.72 449,203.53
(b)Tradepayables 3.2 123.72 78.04
(c)Othercurrentliabilities 3.3 36,474.74 1,450.05
(d)Shorttermprovisions 3.4 15,592.15 11,720.13
Sub-Total - (3) 641,207.33 462,451.75
TOTA (1+2+3) 853,492.08 630,892.90
II ASSETS
1 Non Current Assets
(a)Fixedassets(net) 4.1
i)Tangibleassets 4,241.36 4,479.10
ii)Intangibleassets 49.34 9.56
(b)Noncurrentinvestments 4.2 57,340.79 96,605.08
(c)Deferredtaxassets(net) 4.3 599.59 50.63
(d)Longtermloansandadvances 4.4 156,976.20 106,196.65
(e)Othernoncurrentassets 4.5 113.54 872.20
Sub-Total - (1) 219,320.82 208,213.22
STCI FINANCE LIMITED
(Formerly known as Securities Trading Corporation of India Limited)
138
CONSOLIDATED BALANCE SHEET AS AT MARCH 31, 2015(`inlakhs)
Particulars NoteNo.
As at March 31, 2015
As at March 31, 2014
2 Current Assets
(a)Currentinvestments 5.1 3,884.26 998.02
(b)Inventories 5.2 346,211.54 178,444.24
(c)Tradereceivables 5.3 20.63 297.57
(d)CashandBankBalances 5.4 36,030.19 42,250.60
(e)Shorttermloansandadvances 5.5 236,498.67 192,308.78
(f)Othercurrentassets 5.6 11,525.97 8,380.47
Sub-Total - (2) 634,171.26 422,679.68
TOTAL (1+2) 853,492.08 630,892.90
The accompanying notes are an integral part of the financial statements.
Asperourreportofevendate
ForandonbehalfofA. J. Shah & Co.Chartered Accountants FirmRegistrationNo.109477W
Devendra J. Shrimanker Partner MembershipNo.41920
Mumbai April 28, 2015
On behalf of the Board of Directors
Mrs. V.R. Iyer Chairperson
T.C. Venkat Subramanian Director
S. Ravi Director
S. Venkateswarlu ManagingDirector
Kamlesh Rathi ChiefFinancialOfficer
Suparna Sharma Company Secretary
MumbaiApril 28, 2015
STCI FINANCE LIMITED
(Formerly known as Securities Trading Corporation of India Limited)
139
CONSOLIDATED STATEMENT OF PROFIT AND LOSS FOR THE YEAR ENDED MARCH 31, 2015 (`inlakhs)
Particulars NoteNo.
For the year endedMarch 31, 2015
For the year endedMarch 31, 2014
I Revenue from Operations
a)Interestincome 7.1 71,714.28 53,853.91
b)Otherfinancialservices 7.2 1,905.00 2,769.10
c)Profit/(Loss)onsaleofsecurities 7.3 12,456.51 7,070.06
86,075.79 63,693.07
II Other income 8 1,573.78 520.79
III Total Revenue (I+II) 87,649.57 64,213.86
IV Expenses
Employeebenefitexpenses 9 1,672.17 1,334.58
Finance costs 10 51,064.45 35,953.03
Depreciationandamortisationexpenses 4.1 261.22 305.88
Other expenses 11 2,478.61 2,104.20
Provision against loans and advances 12 1,073.56 999.58
Total Expenses 56,550.01 40,697.27
V Profit before exceptional and extraordinary items and tax (III - IV)
31,099.56 23,516.59
VI Exceptionalitems(ReferNoteNo.25) 1,087.69 0.00
VII Profit before tax (V+VI) 32,187.25 23,516.59
VIII Taxexpenses
i) Current tax 11,516.66 8,356.00
ii)Deferredtax (548.96) 187.82
iii)Short/(Excess)provisionfortaxofearlieryear(s)
(92.74) 26.52
IX Profit and loss from continuing operations (VII-VIII)
21,312.29 14,946.25
X Profit/(loss)fromdiscontinuingoperations(netoftaxes)
6.64 1.93
XI Profit and loss from operations (after tax) ( IX +X)
21,318.93 14,948.18
STCI FINANCE LIMITED
(Formerly known as Securities Trading Corporation of India Limited)
140
Particulars NoteNo.
For the year endedMarch 31, 2015
For the year endedMarch 31, 2014
XII CSRExpenses(ReferNoteNo.29) 300.54 0.00
XIII Profit available for appropriation ( XI - XII) 21,018.39 14,948.18
XIV Earning per equity share of par value of `100/- each
i)BasicEarningPerShare(EPS)in` 18 56.10 39.34
ii)DilutedEarningPerShare(EPS)in` 18 56.10 39.34
Theaccompanyingnotesareanintegralpartofthefinancialstatements.
CONSOLIDATED STATEMENT OF PROFIT AND LOSS FOR THE YEAR ENDED MARCH 31, 2015 (`inlakhs)
Asperourreportofevendate
ForandonbehalfofA. J. Shah & Co.Chartered Accountants FirmRegistrationNo.109477W
Devendra J. Shrimanker Partner MembershipNo.41920
Mumbai April 28, 2015
On behalf of the Board of Directors
Mrs. V.R. Iyer Chairperson
T.C. Venkat Subramanian Director
S. Ravi Director
S. Venkateswarlu ManagingDirector
Kamlesh Rathi ChiefFinancialOfficer
Suparna Sharma Company Secretary
MumbaiApril 28, 2015
STCI FINANCE LIMITED
(Formerly known as Securities Trading Corporation of India Limited)
141
NOTE NO. 1.1: SHARE CAPITAL
Particulars As at March 31, 2015
As at March 31, 2014
Authorised
50,000,000Equitysharesof`100/-each 50,000.00 50,000.00
50,000.00 50,000.00
Issued, subscribed, and fully paid up
Equity Share Capital
38,000,000(PY-38,000,000)Equitysharesof`100/-eachfullypaid up
38,000.00 38,000.00
Total 38,000.00 38,000.00
a) Details of Shareholding as at March 31, 2015
i) 11,383,781numberofequitysharesof`100/-eachheldbyBankofIndia,thelargestshareholder ofthecompany.
ii) Shareholdersholdingmorethan5%ofEquitySharesoftheCompanyareasunder:
Name of Shareholder As at March 31, 2015 As at March 31, 2014
No of Shares % of holding No of Shares % of holding
BankofIndia 11,383,781 29.96% 11,383,781 29.96%
InfrastructureDevelopmentFinanceCompanyLimited
3,530,136 9.29% 3,530,136 9.29%
StateBankofIndia 2,812,415 7.40% 2,812,415 7.40%
IDBIBankLimited 2,507,610 6.60% 2,507,610 6.60%
b) Details of shares bought back during past five years
Year in which shares bought back Class of Shares No of shares
FinancialYear2009-10 EquityShares 3,000,000
Total equity shares bought back in last five years of ` 100/- each
3,000,000
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED MARCH 31, 2015
(`inlakhs)
STCI FINANCE LIMITED
(Formerly known as Securities Trading Corporation of India Limited)
142
c) Reconciliation of the number of equity shares outstanding of ` 100/- each
Particulars As at March 31, 2015
As at March 31, 2014
Numberofsharesatthebeginningofyear 38,000,000 38,000,000
Add:Sharesissued 0 0
Less:Shareboughtback/forfeited 0 0
Numberofsharesattheendofyear 38,000,000 38,000,000
d) Eachequityshareisentitledtoonevotepershare.TheCompanyhasonlyoneclassofequityshares havingparvalueof`100/-each.
Particulars As at March 31, 2015
As at March 31, 2014
Reserve created pursuant to Section 45 I C of RBI Act, 1934
Balanceatthebeginningoftheyear 33,319.70 30,330.23
Add:-Amounttransferredfromsurplusinstatementof profitandloss
4,689.50 2,989.47
Balance at the end of the year (a) 38,009.20 33,319.70
Capital Redemption Reserve
Balanceatthebeginningoftheyear 15,400.00 15,400.00
Add:-Amounttransferredfromsurplusinstatementof profitandloss
1,600.00 0.00
Balance at the end of the year (b) 17,000.00 15,400.00
Capital Reserve
Balanceasatthebeginningoftheyear 27.53 27.53
Add:-Amounttransferredfromsurplusinstatementof profitandloss
0.00 0.00
Balance as at the end of the year (c) 27.53 27.53
Held to Maturity (HTM) Reserve 1
Balanceasatthebeginningoftheyear 135.52 135.52
Add:-Amounttransferredfromsurplusinstatementof profitandloss
1,991.11 0.00
Balance as at the end of the year (d) 2,126.63 135.521 CreatedpurusanttoRBICicularIDMD.PDRDNo.1050/03.64.00/2009-10datedAugust31,2009
NOTE NO. 1.2: RESERVES AND SURPLUS
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED MARCH 31, 2015
(`inlakhs)
STCI FINANCE LIMITED
(Formerly known as Securities Trading Corporation of India Limited)
143
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED MARCH 31, 2015
(`inlakhs)
Particulars As at March 31, 2015
As at March 31, 2014
General Reserve
Balanceasatthebeginningoftheyear 319.22 319.22
Add:-Amounttransferredfromsurplusinstatementofprofitand loss
0.00 0.00
Balanceasattheendoftheyear(e) 319.22 319.22
Surplus in Statement of Profit and Loss
Balanceasatthebeginningoftheyear 17,971.09 9,569.03
Add:-Diff.inDep.onaccountofchangeinestimatedlifeof assets
(9.31) 0.00
Add:-Profitfortheyearavailableforappropriation 21,018.39 14,948.18
TotalProfitavailableforappropriation 38,980.17 24,517.21
Less : Appropriations
StatutoryReserve(asperSection45ICoftheRBIAct,1934)
4,689.50 2,989.47
TransfertoHTMReserve 1,991.11 0.00
TransfertoCapitalRedemptionReserve 1,600.00 0.00
Proposeddividendonequityshares,DPS* `8/-(March31,2014,DPS` 8/-)
3,040.00 3,040.00
Taxonproposeddividend 618.88 516.65
Net surplus in statement of profit and loss (f) 27,040.68 17,971.09*DPS = Dividend Per Share
Total (a+b+c+d+e+f) 84,523.26 67,173.06
STCI FINANCE LIMITED
(Formerly known as Securities Trading Corporation of India Limited)
144
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED MARCH 31, 2015
(`inlakhs)
NOTE NO. 2.1: LONG TERM BORROWINGS
Particulars As at March 31, 2015
As at March 31, 2014
a) Secured
RedeemableNonConvertibleDebentures(NCD’s) 70,000.00 50,000.00
b) Others 0.00 0.00
Total (a+b) 70,000.00 50,000.00
DetailsofoutstandingNCD’s.Particulars Maturity Date As at March 31, 2015 As at March 31, 2014
Current Maturities
Non Current portion
Current Maturities
Non Current portion
3,000(PY-3,000)9.75%NCDs 8-Feb-16 30,000.00 0.00 0.00 30,000.002,000(PY-2000)10.15%NCDs 17-Jan-17 0.00 20,000.00 0.00 20,000.003,000(PY-Nil)9.67%NCDs 25-Jun-19 0.00 30,000.00 0.00 0.002,000(PY-Nil)9.89%NCDs 30-Jul-19 0.00 20,000.00 0.00 0.00Total 30,000.00 70,000.00 0.00 50,000.00
AboveNCDsareredeemableatpar.AboveNCDsareSecuredbywayoffirstchargeonspecificreceivablesandregisteredmortgageoftheCompany’simmovablepropertieswithanoverallassetcoverof125%.
NOTE NO. 2.2: LONG TERM PROVISIONS
Particulars As at March 31, 2015
As at March 31, 2014
Foremployeebenefits 153.02 103.85
Fortaxation 18,930.03 12,524.22
Contingentprovisionagainststandardassets 488.47 362.54
Foramortisationofpremiumondebtinvestments 100.96 188.47
Others 89.01 89.01
Total 19,761.49 13,268.09
STCI FINANCE LIMITED
(Formerly known as Securities Trading Corporation of India Limited)
145
NOTE NO. 3.1: SHORT TERM BORROWINGS
Particulars As at March 31, 2015
As at March 31, 2014
I. Secured Borrowings
a. Loanrepaybleondemand
-frombanks 0.00 0.00
-fromotherparties 0.00 0.00
b. Other loans and advances
CBLOborrowings 58,755.09 73,210.00
Borrowing under Repo 70,087.09 10,598.82
BorrowingUnderLAF/RefinancefromRBI 182,300.00 83,900.00
LoanagainstFixedDepositfromBank2 0.00 37,750.00
Total of Secured Borrowings - (I) 311,142.18 205,458.82
II. Unsecured Borrowings
a. Loanrepaybleondemand
-frombanks2 157,527.70 144,634.09
-fromotherparties(Inter-corporateDeposit) 5,346.84 1,910.62
b. Other loans and advances
-CommercialPapers 115,000.00 97,200.00
Total of Unsecured Borrowings - (II) 277,874.54 243,744.71
Total (I + II) 589,016.72 449,203.53
2Includesloanof` 49,591.84lakhs(PY` 48,530.18lakhs)fromrelatedparty“BankofIndia”
Additional information to secured / unsecured borrowings:
i) Secured short term borrowings
a) CBLOborrowing of` 58,755.09 lakhs (PY -` 73,210.00 lakhs)willmatureonApril 06,2015.TheborrowingunderCBLO issecuredbycollateralofgovernmentsecuritiesandtreasurybills.Governmentsecuritieshavingfacevalueof` 66,500.00lakhs(PY-` 93,900.00lakhs)andCashmarginof̀ 508.00lakhs(PY-̀ 688.00lakhs)hasbeenkeptascollateralwithClearingCorporationofIndiaLimitedforCBLOborrowings.
b) Secured borrowing under Repo outstanding amounted to ` 70,087.09 lakhs (PY -` 10,598.92lakhs)asonMarch31,2015,andissecuredbycollateralofgovernmentsecuritiesandtreasurybillshavingfacevalueof` 67,340.00lakhs(PY-` 10,433.00lakhs).
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED MARCH 31, 2015
(`inlakhs)
STCI FINANCE LIMITED
(Formerly known as Securities Trading Corporation of India Limited)
146
c) Secured borrowing under LAF / Refinance from RBI outstanding as on March 31, 2015 is ` 182,300.00lakhs(PY-` 83,900.00lakhs).Theborrowingissecuredbycollateralofgovernmentsecurities&treasurybillsoffacevalueof` 192,600.00lakhs(PY-` 91,800.00lakhs).
d) LoanagainstfixeddepositoutstandingasonMarch31,2015is` Nil (PY-` 37,750.00lakhs).Theseloansaresecuredbythepledgeoffixeddeposits.
ii) Unsecured short term bank borrowings
a) Bankcreditlines,Shorttermloansandoverdraftfacilitieshavebeenutilisedfromvariousbanksforfinancingactivites,workingcapitalrequirementandassetliabilitymanagement.Thesecreditfacilitiesarerepayableaspertermsofsanctionorondemandandsubjecttoannualreview.
b) Unsecuredbankloanalsoincludes` 78,900.00lakhs(PY-` 60,000.00lakhs)raisedfromvariousbanksrepayableatcall/shortnotice/term.
iii) Inter-corporate Deposit
Outstanding inter corporate deposit as on March 31, 2015 is ` 5,346.84lakhs(PY-` 1,910.62lakhs).
iv) Commercial Paper borrowing
Company raises unsecured short term funds by issuing Commercial Papers. The face value of theoutstanding borrowing as on March 31, 2015 is `115,000.00lakhs(PY-` 97,200.00lakhs).
v) During the year, there has been no default either on principal or interest payment for any of theborrowings.
NOTE NO. 3.2: TRADE PAYABLE
Particulars As atMarch 31, 2015
As atMarch 31, 2014
TradePayable
- Duetomicroandsmallenterprises(ReferNoteNo.22) 0.00 0.00
- Other than micro and small enterprises
i. to subsidiaries 0.00 0.00
ii. to others 123.17 77.33
Others
- Duetomicroandsmallenterprises(ReferNoteNo.22) 0.00 0.00
- Other than micro and small enterprises
i. to subsidiaries 0.00 0.00
ii. to others 0.55 0.71
Total 123.72 78.04
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED MARCH 31, 2015
(`inlakhs)
STCI FINANCE LIMITED
(Formerly known as Securities Trading Corporation of India Limited)
147
NOTE NO. 3.3: OTHER CURRENT LIABILITIES
Particulars As atMarch 31, 2015
As atMarch 31, 2014
CurrentmaturitiesofLong-termborrowings(ReferNote2.1) 30,000.00 0.00
- Interestaccruedbutnotdueonborrowings3
3 (includingrelatedpartyamountof`45.07lakhs, (PY-`33.73lakhs)
4,766.79 1,268.61
- Statutory dues 1.40 1.33
- Marginmoneyandotherdeposits/payables 1,706.55 180.11
Total 36,474.74 1,450.05
NOTE NO. 3.4: SHORT TERM PROVISIONS
Particulars As atMarch 31, 2015
As atMarch 31, 2014
Foremployeebenefits 72.38 62.91
Fortaxation 9,474.73 4,847.82
Forperformancelinkedvariablepay 691.36 644.71
Contingentprovisionagainststandardassets 1,105.53 1,747.17
Provisionforproposeddividend 3,040.00 3,040.00
Provisionfordividenddistributiontax 618.88 516.65
For stamp duty 273.33 246.23
Forinterestrateswap/futures 315.94 614.64
Total 15,592.15 11,720.13
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED MARCH 31, 2015
(`inlakhs)
STCI FINANCE LIMITED
(Formerly known as Securities Trading Corporation of India Limited)
148
NO
TE N
O. :
4.1
FIX
ED A
SSET
S
PART
ICU
LARS
Gro
ss B
lock
Dep
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ation
/ A
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tisa
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Blo
ck
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at
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il 01
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14
Add
ition
s fo
r
the
year
Ded
ucti
ons
for
th
e pe
riod
As
at
Mar
ch 3
1,
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As
at
Apr
il 01
, 20
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For
the
peri
od
Ded
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on/
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ustm
ents
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pto
Mar
ch
31, 2
015
As
at
Mar
ch
31, 2
015
As
at
Mar
ch
31, 2
014
ITa
ngib
le A
sset
s
a)Air-Con
ditio
ners
59.85
1.09
0.45
60.49
23.72
5.97
0.45
29.24
31.25
36.13
b)Bu
ildin
gs *
5,268
.01
--
5,268
.01
1,11
9.96
153
.60
-1,273
.56
3,994
.454,148
.05
c)Co
mpu
ters
214
.95
12.35
2.31
224
.99
155
.98
32.66
2.31
186
.33
38.66
66.07
d)ElectricalIn
stallatio
ns71.84
-
-71.84
26.98
6.95
-33.93
37.91
44.86
e)Fu
rnitu
re&Fixtures
224
.13
--
224
.13
105
.60
19.30
-
124
.90
99.23
118
.53
f)OfficeEqu
ipmen
ts64.12
3.43
0.54
67.01
29.51
21.55
0.54
50.52
16.49
36.82
g)Ve
hicles
45.95
-
4.93
41.02
17.31
5.27
4.93
17.65
23.37
28.64
Sub-
tota
l (I)
5,9
48.8
5 1
6.87
8
.23
5,9
57.4
9 1,
479.
06
245
.30
8.2
3 1
,716
.13
4,2
41.3
6 4
,479
.10
Previou
sYear
5,919
.03
50.42
20.60
5,948
.85
1,18
3.85
299
.81
13.91
1,469
.75
4,479
.104,735
.18
IIIn
tang
ible
Ass
ets
a)So
ftwarean
dLicenses
176
.53
55.70
-
232
.23
166
.97
15.92
-
182
.89
49.34
9.56
Sub-
tota
l (II)
176
.53
55.
70
- 2
32.2
3 1
66.9
7 1
5.92
-
182
.89
49.
34
9.5
6
Previou
sYear
171
.62
4.91
-17
6.53
160
.90
6.07
-
166
.97
9.56
10.72
IIIG
rand
Tot
al -
(I+I
I) 6
,125
.38
72.
57
8.2
3 6
,189
.72
1,64
6.03
2
61.2
2 8
.23
1,8
99.0
2 4
,290
.70
4,4
88.6
6
Previou
sYear
6,090
.65
55.33
20.60
6,125
.38
1,34
4.75
305
.88
13.91
1,636
.72
4,488
.66
4,745
.90
4 Dep
reciati
onasatApril01
,201
4inclue
ds`
9.31lakh
schargedinre
specto
fthe
assetswho
seusefullife
had
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pril,
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(based
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*Co
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AL
STAT
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TS F
OR
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YEA
R EN
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MA
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31,
201
5 (`in
lakh
s)
STCI FINANCE LIMITED
(Formerly known as Securities Trading Corporation of India Limited)
149
NOTE NO. 4.2: NON CURRENT INVESTMENTS
Particulars Face Value Quantity As atMarch 31,
2015
As atMarch 31,
2014I. Trade Investments a) Investment in Equity Shares
(Unquoted and fully paid)ClearingCorporationofIndiaLimited(PY5,000,000)
`10 5,000,000 500.00 500.00
Total Trade Investments (A) 500.00 500.00
II. Other Investments (Non Trade)a) Investment in Equity Shares (Quoted
and fully paid)BharatHeavyElectricalsLimited (PY-138,180)
`2/- 138,180 428.20 428.20
CromptionGreavesLmited (PY-40,000)
`2/- 40,000 77.93 77.93
FutureRetailLimited(ex-PantaloonRetail)(PY-45,000)
`2/- 45,000 82.41 82.41
HeroMotocorpltd(PY-Nil) `2/- 500 13.09 0.00ITCLtd(PY-Nil) `1/- 35,000 120.60 0.00NTPCLimited(PY-150,000) `10/- 150,000 227.01 227.01PowerGridCorpofIndiaLimited (PY-127,746)
`10/- 60,000 80.25 140.27
BhartiAirtelLimited(PY-70,000) `5/- - 0.00 238.44HindustanPetroleumCorporationLtd(PY-20,000)
`10/- - 0.00 64.88
IndianOilCorporationLimited (PY-50,000)
`10/- - 0.00 152.41
LICHousingFinanceLtd(PY-1,50,000) `2/- - 0.00 127.70SadbhavEngineeringLimited (PY-94,894)
`1/- - 0.00 142.15
TheFederalBankLimited (PY-1,50,000)
`2/- - 0.00 143.06
Sub Total (a) 1,029.49 1,824.46
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED MARCH 31, 2015
(`inlakhs)
STCI FINANCE LIMITED
(Formerly known as Securities Trading Corporation of India Limited)
150
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED MARCH 31, 2015
(`inlakhs)
Particulars Face Value Quantity As atMarch 31,
2015
As atMarch 31,
2014b) Investment in Government Securities4
(Quoted)8.15%GS2022 (PYFaceValue-`10,000lakhs)
`7,500lakhs 7,604.41 10,098.91
8.20%GS2022 (PYFaceValue`2,500lakhs)
`2,500lakhs 2,535.90 2,535.90
8.28%GS2032(PYFaceValue-`7,500lakhs)
`6,500lakhs 6,694.10 7,680.65
8.33%GS2032 (PYFaceValue-`500lakhs)
`500lakhs 529.50 529.50
8.30%GS2042 (PYFaceValue-`3,000lakhs)
`1,000lakhs 1,070.00 3,107.95
8.26%GS2027 (PYFaceValue-`2,500lakhs)
`2,500lakhs 2,656.60 2,656.60
8.33%GS2036 (PYFaceValue-`6,000lakhs)
`500lakhs 511.25 6,087.00
8.17%GS2044(PYFaceValue-Nil) `14,500lakhs 14,531.26 0.008.60%GS2028(PYFaceValue-Nil) `17,500lakhs 17,361.05 0.008.12%GS2020(PYFaceValue`376lakhs) - 0.00 392.698.97%GS2030 (PYFaceValue`19,500lakhs)
- 0.00 21,592.35
9.20%GS2030 (PYFaceValue`25,000lakhs)
- 0.00 25,740.00
8.20%GS2025(PYFaceValue-̀ 4,500lakhs) - 0.00 4,692.758.33%GS2026(PYFaceValue-̀ 2,000lakhs) - 0.00 1,991.258.28%GS2027 (PYFaceValue-`500lakhs)
- 0.00 524.00
5a)Securitieshavingfacevalueof`52,500.00lakhs(PY`78,750.00lakhs)hasbeenkeptascollateralforborrowingsandsettlementwithCCIL&NSE. b)Securitieshavingbookvalueof`31,380.63lakhs(PY`50,801.94lakhs)heldinHTMportfolio.
Sub Total (b) 53,494.07 87,629.55
STCI FINANCE LIMITED
(Formerly known as Securities Trading Corporation of India Limited)
151
Particulars Face Value Quantity As atMarch 31,
2015
As atMarch 31,
2014c) Investment in Corporate Bonds
(Quoted)10%STFL(maturing30.06.2015) (PY-3,920)6
` 1lakhs - 0.00 3,878.06
9.85%SBI(maturing27.06.2016)(PY-50)
` 10lakhs 50 514.20 514.20
8.60%LICHsg.FinanceLtd (maturing31.05.2020)(PY-100)
` 10lakhs - 0.00 938.30
Sub Total (c) 514.20 5,330.566Dislcosedundercurrentinvestmentinviewofitsresidualmaturityperiod.
d) Investment in Venture Capital Funds (Unquoted and partly paid)Tataventurecapitalfunds-classAunits(PY:250,000,000)
` 1 250,000,000 1,803.03 1,320.51
Amountpaidperunit-`0.7212 (PY`0.5282)UncalledcapitalcontributionasonMarch 31, 2015 is `696.97lakhs (PY`1,179.49lakhs)
Sub Total (d) 1,803.03 1,320.51
Total Non Trade Investments (II)=(a+b+c+d) 56,840.79 96,105.08
Total (I + II) 57,340.79 96,605.08
Aggregatebookvalueofquotedinvestments 55,037.76 94,784.57Aggregatemarketvalueofquotedinvestments 56,865.14 88,154.72Aggregateamountofunquotedinvestments 2,303.03 1,820.51
Alltheaboveinvestmentsarecarriedatcost.Netdeclineof` 158.84lakhs(PY-`359.02lakhs)invalueofquotedequitysharesand` Nil(PY-` 6,316.25lakhs)invalueofgovernmentsecurities,isconsideredtobeoftemporarynatureandaccordinglynotprovidedfor.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED MARCH 31, 2015
(`inlakhs)
STCI FINANCE LIMITED
(Formerly known as Securities Trading Corporation of India Limited)
152
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED MARCH 31, 2015
(`inlakhs)
NOTE NO. 4.3: DEFERRED TAX ASSETS (NET) Companyhasaccountedforthedeferredtaxassetsandliabilitiesinrespectofthetimingdifferencesthroughthestatementofprofitandloss.Thecomponentsofthedeferredtaxasset/liabilityareasunder:Particulars As at
March 31, 2015Charge during
the yearAs at
March 31, 2014Deferred Tax Liability Depreciationonfixedassets 325.48 (47.24) 278.24AmortisationofNCDIssueExpenses 75.07 (12.30) 62.77
400.55 (59.54) 341.01 Deferred Tax Asset:Provisionforleaveencashment&gratuity 75.77 (19.92) 55.85Provisionforpaymentofstampduty 104.86 (9.64) 95.22Otherprovisions–PLVP/Amortisation 279.31 (38.74) 240.57Provisionfornon-performingassets(NPA) 540.20 (540.20) 0.00Total deferred tax assets 1,000.14 (608.50) 391.64 Net Deferred Tax (Asset)/Liability (599.59) 548.96 (50.63)
NOTE NO. 4.4: LONG TERM LOANS AND ADVANCES
Particulars As at March 31, 2015
As at March 31, 2014
I. Secured, Considered Gooda. Loanagainstshares 65,612.92 54,580.61b. Corporate and other loans 71,435.20 36,695.64Gross long term loans and advances 7 137,048.12 91,276.25Less:-Provisionfornonperformingassets8 2,222.78 633.51Net long term loans and advanes 134,825.34 90,642.747Allnonperformingloansandadvanceshavebeentreatedasnoncurrentassets.
II. Unsecured, Considered Gooda. Loanagainstshares 2,166.41 2,455.58b. Capital advances 1.05 1.05c. Advance income and wealth tax payments 19,684.87 12,803.82d. Security deposits 298.53 293.46
22,150.86 15,553.918Includesprovisionforunsecuredloans&advances
Total (I +II) 156,976.20 106,196.65
STCI FINANCE LIMITED
(Formerly known as Securities Trading Corporation of India Limited)
153
NOTE NO. 4.5: OTHER NON CURRENT ASSETS
Particulars As atMarch 31, 2015
As at March 31, 2014
UnamortizedNCDissueexpenses 113.54 97.31
Incomeaccruedbutnotdueonloansandadvances 0.00 774.89
Total 113.54 872.20
NOTE NO. 5.1 : CURRENT INVESTMENTS
Particulars Face Value Quantity As atMarch 31, 2015
As atMarch 31, 2014
Non Trade Investmentsi) Investment in Corporate Bonds
(Quoted)9
10%STFL(30.06.2015)(PY3920) `1lakhs 3,920 3,878.06 0.009.62%L&TFinanceLtd.(29.09.2014) (PY100)
`10lakhs - 0.00 995.40
ii) Investment in Mutual Fund Units (Quoted)LICNomuraMFSavingPlusFund-GrowthPlan(PYunits:14226.412)
`10 6,534.61 1.20 2.62
LICSavingsPlusFund-DirectGrowthPlan(PYunits:Nil)
`10 24,474.17 5.00 0.00
Total 3,884.26 998.029TheinvestmentinCorporateBondshasbeendisclosedascurrentinvestmentinviewofitmaturingwithin12monthsfromthedateofbalancesheet.However,thevaluationofsamehasbeendoneasperitsoriginalclassificationoflongterminvestmentsatbookcostlesspermanentdiminutioninvalue,ifany.Aggregatebookvalueofquotedinvestments 3,884.26 998.02Aggregatemarketvalueofquotedinvestments 3,929.45 1,003.55Aggregateamountofunquotedinvestments 0.00 0.00Aggregateprovisionfordimunitioninvalueofinvestments 0.00 0.00
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED MARCH 31, 2015
(`inlakhs)
STCI FINANCE LIMITED
(Formerly known as Securities Trading Corporation of India Limited)
154
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED MARCH 31, 2015
(`inlakhs)
NOTE NO. 5.2 : INVENTORIES (STOCK-IN-TRADE)Particulars As at
March 31, 2015As at
March 31, 2014GovernmentSecurities(incl.TBills) 308,138.65 140,887.15Corporate Bonds 23,862.64 16,633.43CertificatesofDeposits 9,418.27 10,989.79Commercial Papers 4,692.53 9,689.25EquityShares 99.45 244.62Total 346,211.54 178,444.24
i) Thecostforeachsecurityundertherelevantcategoryiscalculatedonweightedaveragebasis.Inventory/CurrentInvestmentineachcategoryisvaluedscrip-wise,atcostormarketvaluewhicheverislower.NetDepreciationineachcategoryisprovidedfor/chargedtotheProfit&Lossaccount.Netappreciation,inthecategory,ifany,isignored.Depreciationinonecategoryisnotsetoffagainstappreciationinanothercategory.
ii) The stock-in-trade as onMarch31, 2015, includesGovernment Securities and TreasuryBills of FaceValue`279,440.00lakhs(PY:`123,633.00lakhs)keptascollateralforshorttermborrowings.
NOTE NO. 5.3 : TRADE RECEIVABLES
ParticularsAs at
March 31, 2015As at
March 31, 2014Unsecured, Considered good- Outstandingforaperiodexceedingsixmonthsfromthedate
theyaredueforpayment0.00 0.00
- Others 20.63 297.57Total 20.63 297.57
STCI FINANCE LIMITED
(Formerly known as Securities Trading Corporation of India Limited)
155
NOTE NO. 5.4: CASH AND BANK BALANCES Particulars As at
March 31, 2015As at
March 31, 2014I. Cash and Cash Equivalents
- Balancewithbanks 1,010.26 638.07- CurrentaccountbalancewithRBI 22.42 23.48- Cash on hand 0.24 0.05
II. Other Bank Balances 10
- Fixeddepositswithoriginalmaturityofmorethan3months but less than 12 months 10
34,597.27 40,554.00
- Fixeddepositswithoriginalmaturityofmorethan12months
400.00 1,035.00
Total 36,030.19 42,250.60
10 a) FixedDepositworthof`15.00lakhs(PY:`15.00lakhs)hasbeenlienmarkedinfavourofNationalCommodityandDerivativeExchangeLtd.(NCDEX)asBaseCapital.
b) LoanavailedbypledgeoffixeddepositsasonMarch31,2015is`Nil(PY-`37,750.00lakhs).
c) Fixed deposit of `500.00 lakhs(PY `500.00 lakhs) is keptwithHDFC bank asmarginmoney forsettlementofGSectrades.
d) MarginMoneyforequityderivativesisgivenintheformoffixeddeposits.Fixeddepositincludes(a)`150.00lakhs(PY-`495.00lakhs)inthenameofNationalSecuritiesClearingCorporationLimitedtowardsmarginrequirementsforEquityFutures&Optionssegment,and(b)`250.00(PY-`500.00lakhs)withcustodian-HDFCBankformeetingmarginrequirementsforequitysegment.
NOTE NO. 5.5: SHORT TERM LOANS AND ADVANCES
Particulars As atMarch 31, 2015
As atMarch 31, 2014
I. Secured, Considered Gooda.Loanagainstshares 186,708.74 174,327.80b.Corporateloans 33,556.48 10,811.11
220,265.22 185,138.91
II. Unsecured, Considered Gooda.Loanagainstshares 6,117.09 1,654.64b.Advanceincomeandwealthtaxpayments 9,670.97 4,736.37c.Securitydeposits 330.00 688.00d.Otherloansandadvances 115.39 90.86
16,233.45 7,169.87
Total 236,498.67 192,308.78
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED MARCH 31, 2015
(`inlakhs)
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED MARCH 31, 2015
(`inlakhs)
NOTE NO. 5.6: OTHER CURRENT ASSETS
Particulars As atMarch 31, 2015
As atMarch 31, 2014
Accrued interest 6,011.78 5,277.51Other current assets 5,514.19 3,102.96Total 11,525.97 8,380.47
NOTE NO. 6.1 CONTINGENT LIABILITIES (TO THE EXTENT NOT PROVIDED FOR)
Claims against the company not acknowledged as debt:
a) a) TheCompanyhad received anotice from theCentral Excise authorities in respectof the interiorworkamountingto`20.80lakhcarriedoutbyacontractorattheerstwhileofficepremisesatKrishnaChambers, 59, Sir Vithaldas ThackerseyMarg,NewMarine Lines,Mumbai in the year 1997-98. TheCompanyhasbeenlegallyadvisedthatthereisnoliabilityundertheCentralExciseActandaccordinglynoprovisionhasbeenmadeagainstthisclaim.
b) NoprovisionhasbeenmadeinrespectoffollowingdisputedtaxduesunderIncomeTaxact1961.Thetax liability under dispute is `944.11lakhs(PY`929.13lakhs):
Statute Disputed tax liability Period to which dispute relates
Forum where dispute is pending
IncomeTaxDepartment `76.39 lakhs F.Y.1999-00 MumbaiHighCourtIncomeTaxDepartment `100.82 lakhs F.Y.2000-01 MumbaiHighCourtIncomeTaxDepartment `248.08 lakhs F.Y.2002-03 MumbaiHighCourtCompany `15.87 lakhs F.Y.2006-07 AssessingOfficerCompany `0.08 lakhs F.Y.2007-08 AssessingOfficerCompany `153.00 lakhs F.Y.2007-08 CIT(Appeal)Company `3.54 lakhs F.Y.2008-09 ACIT-TDS-3(2)Company `2.94 lakhs F.Y.2009-10 ACIT-TDS-3(2)IncomeTaxDepartment/Company
`30.11 lakhs F.Y.2009-10 ITAT
Company `10.72 lakhs F.Y.2010-11 ACIT-TDS-3(2)Company `249.95 lakhs F.Y.2010-11 ITATCompany `52.61 lakhs F.Y.2011-12 CIT(Appeal)
c) Noprovisionhasbeenmadeforstampdutyonnon-governmentsecuritiestransactionsfortheperiodupto31stMarch2006(ReferNoteNo.21).
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NOTE NO. 6.2 : CAPITAL AND OTHER COMMITMENTS:
a) Estimatedamountofcontractsremainingtobeexecutedoncapitalaccountandnotprovidedfor(netofadvances) is `6.32lakhs(PY`22.51lakhs).
b) UncalledcapitalcontributiontoTataVentureCapitalFundasonMarch31,2015is`696.97lakhs(PY-`1,179.49lakhs)
c) Disclosureoninterestrateswaps
Transaction details As atMarch 31, 2015
As atMarch 31, 2014
Notionalprincipalofinterestrateswapsfortrading 2,68,711.36 88,551.93Notionalprincipalofinterestrateswapsforhedging 0.00 0.00Markedtomarketpositionsontradingswaps (295.84) (579.99)
In accordance with the market practice and considering the credit quality of the counter parties,nocollateralhasbeentaken in respectof interest rateswaps.Thecreditexposuresonvariousswapcounterpartiesarewithinthepre-determinedriskparametersandarereviewedperiodically.
d) OpenpositionsinrespectofInterestRateFutureContractsontheBalanceSheetdate
Name of the Security Open Position No. of Units Holding Rate Market Price8.40%GS2024-30.04.2015 Short 1,32,88,000 104.43 104.47
NOTE NO. 7.1: INTEREST INCOME
ParticularsFor the year
endedMarch 31, 2015
For the year ended
March 31, 2014a) Interest on Loans
- Loanagainstshares 30,380.31 25,091.07- Corporate and other loans 8,586.61 3,895.75
b) Interest / Discount on Investments
- Governmentsecurities11 15,322.14 12,684.69- TreasuryBills 10,643.09 5,665.06- Corporate bonds 12 2,192.40 2,073.73- -OthermoneymarketinstrumentsandCBLO 515.59 1,457.69
c) Interest income on interest rate swaps & futures (237.35) (349.03)
d) Interest income from repo 181.18 265.99
e) Others 4,130.31 3,068.96
Total (a+b+c+d+e) 71,714.28 53,853.91
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED MARCH 31, 2015
(`inlakhs)
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED MARCH 31, 2015
(`inlakhs)
11 Interest incomefromgovernmentsecuritiesincludes`6,513.17lakhs(PY`6,264.29lakhs)onlongterminvestmentsingovernmentsecurities.
12 Interestincomefromcorporatebondsincludes`568.59lakhs(PY`662.80lakhs)onlongterminvest-mentsincorporatebonds.
NOTE NO. 7.2: OTHER FINANCIAL SERVICES
Particulars For the year ended
March 31, 2015
For the year ended
March 31, 2014Upfront/Processingfees 1,429.44 823.83
Underwritingfees 395.99 1,648.35
Otherfeebasedincome 79.57 296.92
Total 1,905.00 2,769.10
NOTE NO. 7.3: PROFIT/(LOSS) ON SALE OF SECURITIES
Particulars For the year ended
March 31, 2015
For the year ended
March 31, 2014Governmentsecurities 10,460.60 7,104.66
Corporated bonds 762.24 (733.14)
Equityshares 139.03 99.10
Mutualfundunits 662.13 406.40
Derivatives 3.33 (21.15)
Interestrateswaps/Futures 429.18 214.19
Total 12,456.51 7,070.06
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NOTE NO. 8: OTHER INCOME
Particulars For the year ended
March 31, 2015
For the year ended
March 31, 2014Interestincomeontaxrefunds 43.36 0.00Dividendincome13 198.61 118.04Netgain/(loss)onsaleofinvestments 1,021.21 342.14
Provisionsnolongerrequiredwrittenback 178.74 39.70Miscellaneous income 9.73 20.91IncomefromVentureCapitalFund14 122.13 0.00Total 1,573.78 520.7913Dividendincomeincludes`193.51lakhs(PY`112.08lakhs)beingdividendreceivedoninvestments.14Includespriorperiodincomeof`75.05lakhs(PY`Nil)(ReferNoteNo.25)
NOTE NO. 9: EMPLOYEE BENEFIT EXPENSES
Particulars For the year ended
March 31, 2015
For the year ended
March 31, 2014
Salaries,wages,allowances,etc.1,554.21 1,234.72
Contributiontoprovidentandotherfunds 60.27 54.71Staffwelfareexpenses 57.69 45.15Total 1,672.17 1,334.58
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED MARCH 31, 2015
(`inlakhs)
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NOTE NO. 10: FINANCE COSTS
Particulars For the year ended
March 31, 2015
For the year ended
March 31, 2014
a) Interest expensesOnbankcreditline/overdraft 3,290.47 1,831.00On CP issuance 11,822.54 10,698.74OnCBLOborrowing 6,454.21 5,209.90OnNCDissuance 8,508.12 3,336.55OnCall&termmoney 7,499.80 6,513.90OnborrowingsfromRBI 2,481.49 2,310.80On inter corporate deposit 443.80 968.39Onloanagainstfixeddeposits 17.15 109.67OnrefinancefromRBI 3,063.33 2,237.95On repo borrowings 7,188.61 2,542.14Others 0.00 0.07
50,769.52 35,759.11b) Other borrowing cost 294.93 193.92Total (a+b) 51,064.45 35,953.03
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED MARCH 31, 2015
(`inlakhs)
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NOTE NO. 11: OTHER EXPENSES
ParticularsFor the year
endedMarch 31, 2015
For the year ended
March 31, 2014
Advertisingexpenses 2.46 1.40
Transactionandsettlementcharges 1,432.59 1,057.08Donation 0.00 5.00Electricitycharges 41.76 36.17Informationservices 130.04 144.39Insurancecharges 30.31 25.39Miscellaneous expenses 4.22 7.03Officeexpenses 91.49 85.90PaymenttoAuditors:-Asauditfees 11.76 9.37-Fortaxationmatters 3.31 2.82-Forotherservices 5.12 3.42-Outofpocketexpenses 0.31 0.13Postage, telephone and telegrams 56.28 51.00Printingandstationeryexpenses 19.47 14.92Professionalfees 273.08 290.07Rates and taxes 11.30 10.42Rent 48.76 40.62Repairsandmaintenance-building 31.61 31.92Repairsandmaintenance-others 75.74 68.09Sittingfeestodirectors 26.33 22.04Travelling,conveyanceandcarexpenses 46.40 36.50Amortisationofpremiumondebtinvestments 136.81 159.78Lossonsaleofasset (0.54) 0.74Total 2,478.61 2,104.20
NOTE NO. 12: PROVISION AGAINST LOANS AND ADVANCES
Particulars For the year ended
March 31, 2015
For the year ended
March 31, 2014Contingentprovisionagainststandardassets (515.71) 879.15Provisionagainstnonperformingassets 1,589.27 120.43Total 1,073.56 999.58
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED MARCH 31, 2015
(`inlakhs)
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED MARCH 31, 2015
(`inlakhs)
NOTE NO. 13 : SIGNIFICANT ACCOUNTING POLICIES
13.1 Basis of Preparation of Accounts
The consolidated financial statements have been prepared under historical cost convention onaccrualbasis tocomply inallmaterialaspectswithapplicableaccountingprinciples in India, theAccountingStandards(AS)specifiedundersection133oftheCompaniesAct2013,readwithRule7oftheCompanies(Accounts)Rules,2014andReserveBankof IndiadirectionstoNonBankingFinanceCompanies(NBFCs).ReferNoteno.15forSTCICommoditiesLimitedwhosefinancialshavebeenpreparedonthebasisonnetrealizablevalue.Theaccountingpolicieshavebeenconsistentlyappliedandareconsistentwiththoseusedinthepreviousyear.Allassetsandliabilitieshavebeenclassifiedascurrentandnon-currentaspercompany’snormaloperatingcycleandothercriteriasetoutinthescheduleIIIoftheCompaniesAct,2013.
13.2 Use of Estimates
Thepreparationoffinancialstatements,inconformitywithgenerallyacceptedaccountingprinciples,requiresthemanagementtomakeestimateandassumptionsthataffectsthereportedamountofassets,liabilitiesanddisclosureofcontingentliabilitiesasatthedateoffinancialstatementsandrevenue&expensesforthereportingperiod.Actualresultscoulddifferfromthoseestimates.Anyrevisiontoaccountingestimatesisrecognisedprospectivelyincurrentandfutureperiods.
13. 3 Principles of Consolidation
(i) TheconsolidatedfinancialstatementsrelatetoSTCIFinanceLimited(‘theCompany’),andallofitssubsidiarycompanies.ThefinancialstatementsoftheCompanyanditssubsidiariesare consolidated on line by line basis, by adding together the book values of assets,liabilities, incomeandexpenses after fully eliminating the intra groupbalances and intragrouptransactionsresultinginunrealizedprofitsorlosses.Thefinancialstatementsofthesubsidiariesaredrawnuptothesamereportingdateasthatofparentcompany.
(ii) To theextentpossible, the consolidatedfinancial statementsarepreparedusinguniformaccountingpolicies for like transactionsandotherevents in similar circumstanceandarepresentedinthesamemannerastheCompany’sseparatefinancialstatementsinaccordancewithAccountingStandards(‘AS’)–21,“ConsolidatedFinancialStatements”.
13.4 Revenue Recognition
(i) Treasury Bills, Commercial Papers, Certificate of Deposits and Zero Coupon Bonds
Thedifferencebetweentheacquisitioncostandtheredemptionvalue isapportionedontimebasisandrecognisedasincome.Thesameisincludedinthecarryingamountofthesesecuritiesandtheaggregateamountisregardedascostforthepurposeofvaluationofstock-in-trade.
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(ii) Government Securities, Fixed Income & Other Bonds
a) IncomefromFixedIncomesecuritiesistakenintoaccountonaccrualbasis,providedthat interest rate on these instruments is pre-determined and interest is servicedregularlyandisnotinarrears.
b) TheamountspaidandreceivedtowardsaccruedinterestonthepurchasesandsalesofGovernmentsecuritiesandCorporatebondsarenettedoffattheyear-endandisalsorecognisedasincomeunder“InterestonGovernmentsecurities”and“Intereston Corporate bonds” respectively. Accordingly, in respect of the transactions inGovernmentsecuritiesandCorporatebondsdealtwithonoutrightbasis,acquisitioncostandsaleproceedsarethecontractedpurchasepriceandsalepricerespectively.
c) ThecommissionreceivedfromReserveBankofIndiaonthepurchasesofGovernmentSecurities and Treasury Bills made by the Company through subscription to thefloatation’sintheprimarymarketisdeductedfromthepurchaseconsiderationpaidandthenetamountaftersuchreductionisreckonedascostofthesesecurities.
d) Interest on fixed coupon debt security held on balance sheet date is accrued forexpiredperiodatcouponrate,andinterestonfloatingratesecuritiesisaccruedattheratedeterminedbythetermsofissue.
e) In case of Inflation Indexed Bonds (IIB), the interest and consideration towardspurchaseandsaleof IIBare indexedwith the indexratioprevalentonthedateofthe transaction. The amounts paid and received towards accrued interest on thepurchasesand salesof IIBarenettedoffat theyear-endand reckonedas incomeunder“InterestonIIB”.Accordingly,inrespectofthetransactionsinIIB,acquisitioncostandsaleproceedsarethecontractedpurchasepriceandsalepricerespectively
(iii) Collateralized Borrowing and Lending Obligation (CBLO) Transactions
Transactions for borrowing and lending under CBLO are recorded atmaturity value. Thedifferencepaidorreceivedonredemption is treatedasdiscountpaidonCBLO incaseofborrowing and discount earned on CBLO in case of lending. The difference between thediscountedvalueonborrowingdateorlendingdateasthecasemaybe,andtheredemptionvalueoftheinstrument,outstandingontheBalanceSheetdateisapportionedonthetimebasisandrecognizedasexpenseorincomerespectively.TheunamortiseddiscountonCBLOborrowingandlendingisdisclosedunderothercurrentassetsandothercurrentliabilitiesrespectively.
(iv) Pass Through Certificates (PTCs)
Thedifferencebetweentheacquisitioncost (as reducedby theproportionateamountofinflows)andtheredemptionvalueisapportionedontimebasis(usingtheIRRatthetimeof acquisition) and recognised as accrued income. This accrued income is added to theacquisitioncost(asreducedbytheproportionateamountofinflows)oftherespectivePass
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED MARCH 31, 2015
(`inlakhs)
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED MARCH 31, 2015
ThroughCertificates(PTCs)andthesumisregardedascost(bookvalue)forthepurposeofvaluationofstock-in-trade.Anyincomereceivedonprepaymentsisaddedtotheincome.
(v) Equity Futures and Options
(a) Theinitialmarginandtheadditionalmargininformoffixeddepositspaidforenteringintocontractsforequityfuturesandoptionsaredisclosedundertheheadcashandcashequivalents/loansandadvancesasthecasemaybeintheBalanceSheet.
(b) “Equity Option Premium Account” represents the premium paid or received forbuying or selling the options, respectively. The net premium paid or received forbuyingorsellingtheoption,asthecasemaybe,isrecognisedasprofitorlossforallsettled/expiredcontracts.Similarly,ontheexpiryofthecontractsandonexercisingtheoptions, thedifferencebetweenthefinal settlementpriceandthestrikepriceis recognised as profit or loss. Gains or losses on stock/index futures and optioncontractsarerecognizedonsquaringupofpositionsoronexpiryofcontracts.
(c) Theopenpositionsaremarkedtomarketonthebalancesheetdateandnetlosses,ifany,areprovidedforwhilenetgains,ifany,arenotrecognized.
(d) Thedailymark-to-marketmarginpaidto/receivedinrespectofequityfuturestradesis debitedor credited to thedailymark-to-market equity futures account and thesame is disclosed under trade receivable or trade payable/loans and advances orcurrentliabilities,asthecasemaybe.
(e) “IncomeonEquityFuturesandOptions”representsthenetprofitorlossonsettled/expired positions in equity index and stock futures and options after adjustingbrokerageandothertransactioncosts.
(vi) Commodity Futures
(a) TheinitialmarginandtheadditionalmarginpaidonopenpositionsofcommodityfuturesaredisclosedundertheheadLoansandAdvancesintheBalanceSheet.
(b) The dailymark-to-marketmargin paid to/ received from in respect of commodityfuturestradesisdebitedorcreditedtothedailymark-to-marketmargincommodityfuturesaccountandthesameisdisclosedundertheheadtradereceivableortradepayable in the Balance Sheet, as the case may be. The balance in this accountrepresentsnetunrealisedgainsorlossesonopenpositions.
(c) Theopenpositionsaremarkedtomarketonthebalancesheetdateandnetlosses,ifany,areprovidedforwhilenetgains,ifany,arenotrecognized.
(d) “IncomeonCommodityFutures”representsthenetprofitorlossonsettled/expiredpositionsincommodityfuturesafteradjustingbrokerageandothertransactioncosts.
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(vii) Expenses / Income under Repo Transactions
InlinewiththerevisedguidelinesissuedbytheReserveBankofIndia(RBI),repo/reverserepotransactionsaretreatedasborrowing/lendingtransactions.Further,inlinewiththeRBIguidelines,thedifferencebetweentheconsiderations(cleanpriceandtheaccruedinterest)betweenthe1stand2ndlegoftherepoandreverserepotransactionsisaccountedasRepoExpenditureorRepoIncome,asthecasemaybe,overtheperiodofthecontract.
(viii) Underwriting Fees
Underwriting feeearned inrespectofdevolvement’sunder underwritingcommitments,totheextentapportionabletothecostprotanto,arereducedfromthecostofsecuritiesdevolvingandtheremainingamountisreckonedasincome.
(ix) Brokerage, Securities Transaction Tax (STT) and Other Payments
TheBrokerage,STTandotherpaymentsmadeinconnectionwiththeacquisitionofsecuritiesare added to the cost of acquisition. The amount shown under sale of securities is netofBrokerageandSTT.
(x) Profit/LossfromtradinginEquitiesisrecognisedonthebasisofweightedaveragecostontradedates.Profit/Loss from trading inGovernmentSecurities, FI &OtherBonds,othersecuritiesarerecognisedonthebasisofweightedaveragecostonsettlementdates.
(xi) Interest Rate Swaps (IRS)
CashflowsonInterestRateSwaps(IRS)areaccountedforonaccrualbasisandsettledasperthetermsofthecontract.
(xii) Front-end fees /Arrangers’ Fee
Front-end/Arrangers’feesreceivedonsubscriptiontoFI&OtherBondsarereckonedasincome.
(xiii) Brokerage and Commission Earned
Brokerageandcommissioninrespectissuemarketingandresourcemobilizationareaccruedto the extent of availability of information. Brokerage for commodity brokingbusiness isrecognisedontradedatebasis.Portfoliomanagementandotherfeesareaccountedforonaccrualbasis.
(xiv) IncaseofdiscountedinstrumentsDiscountIncomerepresentstheexcessofsales(includingredemptionproceeds)andthevalueofclosingstockoverpurchases(includingsubscription)andopeningstockofsuchsecurities.
(xv) Dividend income is recognised when the right to receive dividend is established. Bonusentitlementsarerecognisedonex-bonusdates.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED MARCH 31, 2015
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(xvi) InterestincomefromloantransactionsisrecognisedonaccrualbasisbyapplyingtheinterestrateimplicitinsuchcontractsexceptinthecaseofincomeonNon-PerformingAssets(NPAs)which is recognisedonrealisation, intermsofRBIGuidelines.Processingfeeson loans isrecognisedasincomeonaccrualbasis.
(xvii) In case of securities transferred from Stock-in-Trade to Investment Account, the same isreckonedassaleatmarketprice.Resultantgainsorlossesarerecognisedintheprofitandlossaccountonthedateoftransfer.
(xviii) Otherinterestincome(excludinginterestontaxrefunds)isrecognisedonaccrualbasis.
(xix) Hedged Portfolio
a) Securities:-SecuritiesorportfolioofsecuritiesarehedgedusinghedginginstrumentspermittedbyRBIsuchasInterestRateDerivatives.Thesecuritiesthataredesignatedashedgedaretransferredtohedgeportfolioatlowerofcostormarketvalueonthedateofthehedge.
b) Swaps:-Swapsthataredesignatedashedgetoanyassetaremarkedtomarketandthe gainor losson thehedge swapand thehedgedportfolio is setoff;while theresultantnet loss isbeingprovided for, thenetgain is ignored.Gainsor lossesonterminationorre-designationofhedgeswapsisrecognisedagainsttheoffsettinggainorlossrecognisedonthedesignatedassetorliability.
(xx) Interest Rate Futures:
a) The initial margin and the additional margin paid for entering into contracts forinterestratefuturesaredisclosedunderShortTermLoansandAdvances.
b) The daily mark-to-market margin paid to/received from the clearing member inrespectofInterestRateFuturescontractsaredebited/creditedondailybasisandthesameisprovidedunderLoansandAdvancesorCurrentliabilities,asthecasemaybe.
c) TheOpenpositionsaremarkedtomarketonthebalancesheetdate.Gains,ifany,arenotrecognized/providedforandlosses,ifany,areprovidedunderProvisionforLossonInterestRateFuturesAccount.
d) GainsorlossesonInterestRateFuturescontractsarerecognizedonsquaringupofpositionsorexpiryofcontracts,whicheverisearlier.
13.5 Investments
IntermsofNonBankingFinancialCompaniesPrudentialNormsDirectionissuedbyRBI,longterminvestmentsarevaluedatcostcomprisingacquisitioncostandincidentalexpenseslesspermanentdiminutioninvalue,ifany.Provisionfordiminutioninthevalueoflongterminvestmentsismadetorecogniseadeclineotherthantemporaryinthevalueofinvestments.Inthecaseofdebtinstrumentswherethecostofacquisitionismorethantheredemptionvalue,thedifferenceisamortizedovertheperiodtillmaturityandchargedtotheProfitandLossaccount.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED MARCH 31, 2015
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Investmentsotherthanlong-terminvestmentsareclassifiedascurrentinvestmentsandvaluedatcostormarketvaluewhicheverisless.
13.6 Classification and Valuation of Stock-in-trade / Current Investments
Company provides net depreciation category-wise for securities held as stock-in-trade/ currentinvestments.
Allthesecuritiesacquiredwiththeintentionoftradingareconsideredasstock-in-tradeandshownundercurrentassets.
(i) Allquotedsecurities(stock-in-trade)aregroupedintothefollowingcategories.
EquityShares
PreferenceShares
DebentureandBonds
Govt.Securities(includingTBills)
Mutual Fund Units
Others
(ii) Stock/ current Investment in each category is valued scrip-wise, at cost ormarket valuewhicheverislower.
Thecostiscalculatedonweightedaveragebasis.Marketvalueforfixedincomesecuritiesis determined by the prices declared by Fixed Income Money Market and DerivativesAssociationofIndia(FIMMDA).Asregardsthetaxfreebonds,forthepurposeofdeterminingmarketvaluepricequotedontherecognisedstockexchangesontherelevantday isalsoconsidered.Itisvaluedatlowerofweightedaveragecost,FIMMDAvalueormarketvalueasperrecognisedstockexchange.Marketvalueforequitysharesisdeterminedbythepricesobtainedfromtherecognisedstockexchanges.
However, in linewith the RBI and FIMMDA guidelines, Certificates of Deposit (CDs) andCommercialPapers(CPs)oflessthanoneyeartenorarevaluedatcost.Similarly,TreasuryBillsheldasstock-in-tradearevaluedatcarryingcost(asexplainedatSl.No.13.4(i)above).
(iii) UnquotedunitsofMutualFundarevaluedatNetAssetValue(NAV)orcostwhichever islower.
(iv) NetDepreciationineachcategoryisprovidedfor/chargedtotheprofitandlossaccount.Netappreciation,inthecategory,ifany,isignored.
(v) Depreciationinonecategoryisnotsetoffagainstappreciationinanothercategory.
(vi) TheoutstandingswapsheldfortradingpurposearemarkedtomarketonthebalancesheetdateonthebasisofyieldratesdeclaredbyFIMMDA.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED MARCH 31, 2015
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED MARCH 31, 2015
(vii) Government securities held as HTM (Held to Maturity) are valued at amortised cost.Thepremiumpaid ifany,onsecurity isamortisedovertheperiodtillmaturity.Thestockis transferred fromHTM to tradingportfolio at costormarket value,whichever is lower.In respectofGovernment SecuritiesacquiredonHTMbasis,market valueat yearend isdeterminedanddisclosed.Howevernoaccountingadjustmentaremade fordiminution/appreciationinvalueofsuchinvestments.
(viii) Theprofitonsaleofsecurities,ifanyfromHTMcategoryshallfirstbetakentotheProfit&LossAccountandthereafterbeappropriatedtotheCapitalReserveAccount(netoftax).LossonsaleshallberecognizedintheProfit&LossAccount.
13.7 Fixed Assets and Depreciation
Fixedassets(TangibleandIntangible)arestatedatoriginalcostlessaccumulateddepreciation.Costincludesalldirectcostsattributabletoacquisition,installationandcommissioning.
Depreciationonfixedassetsotherthanbuildingsand improvementto leaseholdproperty isprovidedonthestraight linemethodbasedontheestimateduseful livesof theassets.EffectiveApril1,2014,estimatedusefullifeoffixedassetshasbeenrealignedasperScheduleIIoftheCompaniesAct,2013andaccordinglytheestimatedusefullifeofcertainfixedassetshasbeenrevisedperthetablegivenbelow.
BuildingsaredepreciatedonwrittendownvaluemethodattheapplicableratesbasedonestimatedusefullifeprescribedinScheduleIItotheCompaniesAct,2013.
Depreciationon improvements to leaseholdproperty isprovidedonstraight linemethodat theratesarrivedatonthebasisoftheprimaryleaseperiod.
Fixed assets costing less than `0.05 lakhs, are providedwith 100% depreciation in the year ofpurchase.Depreciationisprovidedonproratabasisforassetspurchasedandsoldduringtheyear.
Thedetailsofestimatedusefullifeassets(alignedwithScheduleIItotheCompaniesAct,2013)areasunder.
Description of Asset Type of Asset Estimated useful Life of Asset wef
01.04.2014
Old Estimated useful life
Building Tangible 60years 60yearsFurniture and Fixtures Tangible 10 years 10 yearsComputers-EndUserDevices Tangible 3 years 5 yearsComputers – Servers &Network
Tangible 6Years 5Years
ComputerSoftware Intangible 3 years 3 yearsElectricalInstallations Tangible 10 years 10 yearsAirconditioners Tangible 10 years 10 yearsVehicles Tangible 8 years 8 yearsOfficeEquipment’s Tangible 5 years 10 years
STCI FINANCE LIMITED
(Formerly known as Securities Trading Corporation of India Limited)
169
13.8 Taxes on Income
Provisionforincometaxcomprisesthecurrenttaxprovisionsandthenetchangeinthedeferredtaxassetorliabilityfortheyear.Currenttaxisdeterminedastheamountoftaxpayableinrespectofthetaxableincomefortheyear.Deferredtaxassetorliabilityreflectstheimpactofcurrentyeartimingdifferencesbetweentaxableincomeandtheaccountingincomefortheyearandthereversaloftimingdifferencesofearlieryears.Deferredtaxassetsarerecognizedonlytotheextentthereisareasonablecertaintyofsufficientfuturetaxableincomebeingavailableforitsrealization.DeferredtaxassetsandliabilitiesaremeasuredusingthetaxratesandtaxlawsthathavebeenenactedorsubstantivelyenactedbytheBalanceSheetdate.TheeffectondeferredtaxassetsandliabilitiesofachangeintaxratesisrecognizedintheStatementofProfitandLossintheperiodofenactmentofthechange.
13.9 Securities Accepted as Pledge and Margin Money
Securitiesornon-cashcollateralacceptedfromaborrowerarenotrecognizedasanasset.MarginmoneyreceivedagainstmargincallisshownunderOtherCurrentLiabilities.
13.10 Operating Lease
Themonthlyrentpaymentsmadeforthepremisesacquiredonleasearechargedtoprofitandlossaccountonaccrualbasis.
13.11 Employee Benefits
(i) Provident Fund
Contributions as required under the statute, made to the Provident Fund (DefinedContributionPlan)arechargedtotheProfitandLossAccount.ThereisnoobligationotherthanthemonthlycontributionpayabletotheRegionalProvidentFundCommissioner.
(ii) Gratuity
The liabilityof futuregratuitybenefitsbasedonanactuarial valuation isobtainedat theyearend.TheCompanyhascreatedatrustforfuturepaymentofgratuitieswhichisfundedthroughGratuitycumLifeAssuranceSchemeofLIC(DefinedBenefitPlan).
(iii) Other Benefits
Otherlongtermemployeebenefitscompriseleaveencashmentandareprovidedforbasedontheactuarialvaluationandisnotfunded.Shorttermcompensatedabsencesareprovidedonundiscountedbasis.TheProjectedUnitCreditmethodhasbeenusedtodeterminetheliabilityonaccountofgratuityaswellas leaveencashment.Theactuarialgainsor loss isimmediatelyrecognizedintheProfitandLossAccount.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED MARCH 31, 2015
STCI FINANCE LIMITED
(Formerly known as Securities Trading Corporation of India Limited)
170
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED MARCH 31, 2015
13.12 Borrowing Cost
BorrowingcostsareinterestandancillaryexpenditureincurredbytheCompanyinconnectionwiththeborrowingoffunds.InterestischargedtotheProfitandLossAccountonaccrualbasis.Ancillaryexpenditureincurredinconnectionwiththearrangementofborrowingisamortisedoverthetenureof the respectiveborrowings.Borrowingcostother thandirectlyattributable tofixedassetsaredirectlyrecognisedasexpenseintheperiodinwhichtheyareincurredandarechargedtorevenue.
13.13 Impairment of Assets
Anassetistreatedasimpairedwhenthecarryingcostofassetexceedsitsrecoverablevalue.Animpairmentloss,ifany,ischargedtotheProfitandLossAccounttotheextentcarryingamountofassetsexceedstheirrecoverableamountintheyearinwhichasassetisidentifiedasimpaired.
13.14 Earnings Per Share (E.P.S.)
Thebasicearningspershareiscomputedbydividingthenetprofitaftertaxbyweightedaveragenumberofequitysharesoutstandingduringthereportingperiod.Dilutedearningsperequityshareiscomputedbydividingthenetprofitaftertaxbytheweightedaveragenumberofequitysharesanddilutivepotentialequitysharesoutstandingduringthereportingperiod.
13.15 Provisions and Contingencies
TheCompanycreatesaprovisionwhenthereisapresentobligationasaresultofpasteventthatprobablyrequiresanoutflowofresourcesandareliableestimatecanbemadeoftheobligation.Adisclosureofcontingentliabilityismadewhenthereis:(a)apossibleobligation(obligationisapossibleobligation if,basedontheevidenceavailable, itsexistenceat thebalancesheetdate isconsiderednotprobable)thatarisesfrompasteventsandtheexistenceofwhichwillbeconfirmedonlybytheoccurrenceornon-occurrenceofoneormoreuncertainfutureeventsnotwhollywithinthecontroloftheenterprise(b)apresentobligationthatarisesfrompasteventsbutisnotrecognisedbecause(i)itisnotprobablethatanoutflowembodyingeconomicbenefitswillberequiredtosettletheobligation;or(ii)areliableestimateoftheamountoftheobligationcannotbemade.
13.16 Advances and Provision for Non-Performing Assets (NPA) and Standard Assets (SA)
Allloansandothercreditexposures,wheretheinstalmentsareoverdueforaperiodofsixmonthsormoreareclassifiedasNPA.ProvisionismadeinrespectofNPAandSA,subjecttotheminimumprovisionrequiredasperNon-BankingFinancial(Non-DepositacceptingorHolding)CompaniesPrudentialNorms,orwhereadditionalspecificrisksareidentifiedbythemanagement, based on suchidentification.
13.17 Foreign Exchange Transactions
Expensesandremittancesinforeigncurrencyareaccountedatexchangeratesasonthetransactiondate.
STCI FINANCE LIMITED
(Formerly known as Securities Trading Corporation of India Limited)
171
Notes forming part of consolidated financial statements
14. Detailsofentitiesconsideredintheconsolidatedfinancialstatement
Name of the entity Net Assets ( Total assets minus total
liabilities)
Share in profit or loss (PBT)
As % of consolidated
net assets
Amount (` in lakhs)
As % of consolidated profit or loss
(PBT)
Amount
(` in lakhs)
STCIFinanceLimited(parent)15 70.51% 86,387.78 59.10% 19,026.42
Subsidiaries(Indian)
STCIPrimaryDealerLimited 29.38% 35,999.51 40.88% 13,160.83
STCICommoditiesLimited 0.11% 135.97 0.02% 7.30
Subsidiaries(Foreign) - - - -
MinorityInterestsinallsubsidiaries - - - -
Associates(Indian) - - - -
Associates(Foreign) - - - -
JointVentures(Indian) - - - -
JointVentures(Foreign) - - - -
Total 100.00% 122,523.26 100.00% 32,194.55
15AfteradjustingforIntergroupinvestmentsandprofit.
15. The subsidiary companies considered in the consolidated financial statements are:
Name of Subsidiary Company Country of Incorporation Proportion of ownership interest
STCIPrimaryDealerLimited(STCIPD)16 India 100%
STCICommoditiesLimited17 India 100%
16 STCI PDwas incorporated inOctober 2006 as awholly owned subsidiary of the company forundertakingPrimaryDealershipbusinessofgovernmentsecurities.
17 STCICommoditiesLimitedwasincorporatedonSeptember20,2004withtheobjectofcarryingonthebusinessoftradingandbrokingincommoditiesonthevariousCommodityExchangesi.e.MultiCommodityExchange(MCX)andNationalCommodityandDerivativeExchange(NCDEX),Mumbai.The business operations of STCI Commodities Limited were discontinued with effect from 20th September2011andpresentlythecompanyisintheprocessofliquidatingitsassetsandsettlingtheoutstandingliabilities.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED MARCH 31, 2015 in lakhs)
STCI FINANCE LIMITED
(Formerly known as Securities Trading Corporation of India Limited)
172
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED MARCH 31, 2015
Therefore,onthegroundsofprudenceandconsideringtherequirementsofAccountingStandard-1(AS)on“DisclosureofAccountingPolicies”theaccountsofSTCICommoditiesLimitedhavebeendrawnaspernetrealizablevalue.Consequently,adjustmentshavebeenmadetothecarryingvalueofassetstoreflectthetrueandfairviewofthefinancialposition.
The operational results of STCI Commodities Limited have been considered as discontinuedoperations under AS – 24 “Discontinuing Operations”. The summarised details of discontinuingoperationsareasunder.
ThecarryingamountofthetotalassetsandliabilitiesofSTCICommoditiesLimited(discontinuingoperations)asonMarch31,2015areasunder.
(`inlakhs)
Particulars As at March 31, 2015
As at March 31, 2014
Totalassets 146.45 140.09
Totalliabilities 10.48 10.76
Net assets 135.97 129.33
Therevenueandexpensesinrespectofdiscontinuedoperationsareasunder.
(`inlakhs)
Particulars For the year ended
March 31, 2015
For the year ended
March 31, 2014Totalrevenue 9.74 9.46
Totalcostandexpenses 2.44 7.53
Operatingincome/(loss)beforetaxes 7.30 1.93
Taxexpenses 0.66 0.00
Netincome/(loss)fromdiscontinuedoperations(aftertax) 6.64 1.93
16. Expenditure in Foreign Currency (`inlakhs)
Sr. No. Particulars For the year ended
March 31, 2015
For the year ended
March 31, 20141 OnTravel 0.13 1.60
2 OnInterest Nil Nil
3 On Others 4.46 0.17
EarningsinForeignCurrency:`Nil.(PY-Nil)
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17. AsubsidiaryhasbeendealinginGovernmentSecuritiesonbehalfoftheConstituentsthroughtheConstituentSGLaccountopenedwithRBI.ThetransactionsundertakencovermoniesreceivedfromtheconstituentsandalsophysicalstenderedbythemforconversionintoSGLAccount.AsonMarch31,2015,thefacevalueofthesecuritiesheldonbehalfoftheconstituentsis`1,192,996.80lakhs(PY-`855,191.60lakhs).
18. Earning Per Share (EPS)
TheEPScalculationasperAS-20isgivenbelow:
Particulars For the year ended
March 31, 2015
For the year ended
March 31, 2014ProfitafterTax(` inlakhs) 21,318.93 14,948.18Weightedaverageno.ofshares(F.V.` 100/-) 38,000,000 38,000,000EPSfortheyear–Basic&Diluted(`) 56.10 39.34
19. Assets taken on Lease
TheofficepremiseatDelhihasbeenacquiredunderoperatingleaseonpaymentofmonthlyrentals.Futureminimumleaserentalrelatingtonon-cancellableoperatingleaseperiodareasunder.
(`inlakhs)
Particulars As at March 31, 2015
As at March 31, 2014
Not later than 1 year 18.58 1.29
Laterthan1yearbutnotlaterthan5years 21.17 Nil
Laterthan5years Nil Nil
(` inlakhs)
Particulars FY 14-15 FY 13-14
Paymentmadeduringtheyear(excludingtaxes) 18.14 15.48
Leaserentalcharges(includingcancellablelease)arerecognisedinthestatementofprofitandloss
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED MARCH 31, 2015 in lakhs)
STCI FINANCE LIMITED
(Formerly known as Securities Trading Corporation of India Limited)
174
20. Related Party Transactions
BankofIndia,byvirtueofitsshareholdingbeinginexcessof20%,isconsideredtobearelatedparty.
ThedetailsofthetransactionsenteredintowithBankofIndiaaregivenbelow:-
(`inlakhs)
Nature of transaction For the year ended
March 31, 2015
For the year ended
March 31, 2014Transactions during the year Bank of India Bank of IndiaPurchaseofGovt.Securities/TreasuryBills 27,918.75 57,291.67SaleofGovernmentSecurities/TreasuryBills 111,033.56 181,511.89Saleofcorporatebondsandothermoneymarketinstruments
1,036.86 2,353.87
Loansavailed18 194,868.17 259,425.00Repaymentofloanavailed18 193,806.52 223,294.82Maximumloan(availed)outstandingduringtheyear 49,961.78 49,316.00Fixeddeposits(placedduringtheyear) 82.27 39.00Interestexpensesfortheyear 2,365.77 1,178.72InterestIncomeonFDR(accrued) 7.65 177.09DividendPaid 910.70 910.70Processingfeespaid 39.24 13.48Rent&Sittingfeespaid 3.20 6.35Outstanding as at the end of the yearLoanOutstanding(availed) 49,591.84 48,530.18FixedDeposit 82.27 79.00Interestaccruedbutnotdue(Expenses) 45.07 33.73Interestaccruedbutnotdue(Income) 4.66 6.43Balance in current account 4.66 4.38
18Includesamountsavailedandrepaidfromoverdraftandshorttermloanaccounts.
Allthetransactionsdetailedaboveareenteredintointheordinarycourseofbusiness.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED MARCH 31, 2015
STCI FINANCE LIMITED
(Formerly known as Securities Trading Corporation of India Limited)
175
Remuneration to Key Management Personnel: .
Sl. No.
Name of Key Management Personnel
Nature of Relationship For the year ended
March 31, 2015
For the year ended
March 31, 2014(i) MrS.Venkateswarlu ManagingDirector
(w.e.f.01.05.2013)88.25 40.58
(ii) Mr.P.Sanyal ManagingDirector (upto30.04.2013)
Nil 24.85
(iii) Mr.YogeshGaat ChiefExecutiveOfficer (w.e.f.17.01.2015)
13.82 Nil
(iv) Mr.KamleshRathi ChiefFinancialOfficer 29.25 27.16
(v) Ms.SuparnaSharma Company Secretary 25.13 23.62
There was no transaction with any of the relatives of Key Management Personnel during theyear
21. Nostampdutyhasbeenpaidonnon-governmentsecuritiestransactionsinviewoftheon-goingdeliberations between Government of Maharashtra and various representative bodies of theparticipant’sviz.IBA,FIMMDA,PDAIandAMFI,ontheapplicabilityofstampdutyonnon-governmentsecurities’transactions.TheCompanyhassofarnotreceivedanyclaimforstampdutyfromtheStampOfficeinrespectofnon-governmentsecuritiestransactions.
Forthecurrentyear,provisionof`28.36lakhs(PY`12.94lakhs)calculatedonthebasisof0.01%ofthevalueoftransactionasstipulatedintheamendmenttotheBombayStampAct,1958announcedinMay2005,hasbeenmadeforstampdutyfordirectdealsofnongovernmentsecurities.TheprovisionasonMarch31,2015forstampdutyonnon-governmentsecuritiestransactionsstandsat`335.98lakhs(PY`308.88lakhs).InthelightofanassurancegivenbytheGovernmentofMaharashtratotheIndianBanks’Association,theliabilityonnon-governmentsecuritiestransactionsfortheperiodup to 31stMarch2006hasnotbeenprovided.
22. Therearenoduespayabletomicro,smallandmediumenterprises,inviewofthenatureofbusiness.TheCompanyhasnotreceivedanyintimationfromthesuppliersregardingstatusundertheMicro,SmallandMediumEnterprisesDevelopmentAct,2006.Inviewofthis,informationtothatextentisnotgiven.
23. Segment Reporting
a) Business Segment:
ThemanagementhasidentifiedLending,GiltsandNon-Giltsasreportablesegmentbasedonrisk,returnandtheregulatoryauthoritiesforreporting.Thedetailedsegmentalinformationisasunder:-
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED MARCH 31, 2015 in lakhs)
STCI FINANCE LIMITED
(Formerly known as Securities Trading Corporation of India Limited)
176
For the year ended March 31, 2015 (` inlakhs)
Segment Information Gilts Non-Gilts Lending Unallocated Total Discontinued broking op.
Revenue
FromExternalClient 37,752.76 8,415.87 40,471.36 1,009.58 87,649.57 9.74
Inter-Segment 0.00 0.00 0.00 0.00 0.00 0.00
Total Revenue 37,752.76 8,415.87 40,471.36 1,009.58 87,649.57 9.74
Segment Result 17,040.16 287.16 15,605.70 32,933.02 7.30
Unallocatedexp(net) (1,571.24) 0.00
OperatingProfit 31,360.78 7.30
Depreciation (261.22) 0.00
ExceptionalIncome 1,087.69 0.00
Profit Before Tax 32,187.25 7.30
TaxExpenses (10,874.96) (0.66)
Profit After Tax 21,312.29 6.64
Other Information
Segment Assets 366,076.99 78,943.86 370,565.18 37,759.60 853,345.63 146.45
SegmentLiabilities 335,885.65 60,572.52 301,329.54 33,170.63 730,958.34 10.48
For the year ended March 31, 2014 (` inlakhs)
Segment Information Gilts Non-Gilts Lending Unallocated Total Discontinued broking op.
Revenue
FromExternalClient 27,365.01 6,511.75 30,084.42 252.68 64,213.86 9.46
Inter-Segment 0.00 0.00 0.00 0.00 0.00 0.00
Total Revenue 27,365.01 6,511.75 30,084.42 252.68 64,213.86 9.46
Segment Result 13,874.27 (1,181.26) 13,099.11 25,792.12 1.93
Unallocatedexp(net) (1,969.65) 0.00
OperatingProfit 23,822.47 1.93
Depreciation (305.88) 0.00
Profit Before Tax 23,516.59 1.93
TaxExpenses (8,570.34) 0.00
Profit After Tax 14,946.25 1.93
Other Information
Segment Assets 233,420.91 88,429.72 284,184.78 24,717.40 630,752.81 140.09
SegmentLiabilities 168,603.98 100,229.63 234,984.54 21,890.93 525,709.08 10.76
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED MARCH 31, 2015
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b) Segment Revenues and Expenses:
The segmental revenues and expenses include all directly attributable to the respectivesegment.Administrativeexpenses,personnelcostsanddepreciationonfixedassetscannotbeidentifiedwithanyparticularsegmentandareconsideredasunallocable.
c) Segment Assets and Liabilities:
Thesegmentalassetsandliabilitiesincludealldirectlyattributabletotherespectivesegment.Allotherassetsandliabilitiesnotattributabletoanyparticularsegmenthavebeengroupedunderunallocatedassetsandliabilities.
d) Geographical Segment:
TheCompanydoesnothavegeographicalsegmentinthecontextoftheAccountingStandard17onSegmentReportingissuedbytheInstituteofCharteredAccountantsofIndia.
24. Provisionof`284.29lakhs(PY`379.15lakhs)hasbeenmadeduringtheyeartoensureprovisionof 0.40% on outstanding standard assets as on 31.03.2015. Further, Company has reassessedthe additional provision of `1,000.00 lakhs created for standard assets in earlier years and onreassessment `800.00lakhs(Net)hasbeenreversed(PY`500.00lakhsaddition)inthecurrentyear. Provisionof`1,589.27lakhs(PY`120.43lakhs)hasbeenmadetowardsNonperformingassets.
25. During theyear,`1,087.69 lakhswerereceived fromAdministratorof theSpecifiedUndertakingofUnitTrustofIndia(SUUTI)onaccountofarbitrationawardregardingpurchaseofUTISecurities.Theawardamount includes`1,000.00 lakhs towardsarbitrationaward, interestof`82.19 lakhsandreimbursementofexpensesof`5.50lakhs.Theentirereceiptof`1,087.69isaccountedasanexceptionalincomeforFY14-15.
26. Duringtheyearpriorperiodincomeof`75.05lakhs,attributabletoCompany’sinvestmentinTataGrowthFunds–Ihasbeenbookedonthebasisofconfirmationthattheannualnetdistributableincomeofthefund(earlierandhenceforth)wouldbeadjustedtowardscapitalcallpaymentoftheinvestors.
27. Depreciation
a) EffectiveApril1,2014,estimatedusefullifeofcertainfixedassetshasbeenrealignedasperScheduleIIoftheCompaniesAct,2013.Duetothischangeintheestimatedusefullifeofassets,thedepreciationchargefortheyearislowerby`36.47lakhs.
Duringtheyear,depreciationof`15.51lakhshasbeenbookedinrespectofassetswhoseusefullifehadbeenexhaustedason1stApril,2014(basedonrevisedestimatedlife).Outofabove,`9.31lakhshasbeenadjustedagainstretainedearningand`6.20lakhshasbeendebitedtoprofitandlossaccountinviewoftheMCANotificationNoG.S.R627(E)datedAugust29,2014.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED MARCH 31, 2015
STCI FINANCE LIMITED
(Formerly known as Securities Trading Corporation of India Limited)
178
b) DepreciationonBuildingsischargedonWrittendownvalue(WDV)basisexceptforbuildingownedbySubsidiarySTCIPD,constitutingapproximately38.55%ofthetotalcostofbuildingsownedbythegroup,whichischargedonStraightLineMethod(SLM)basis.
27. ChargehasbeencreatedinfavourofDebentureTrusteeforLoansandAdvancesof`127,150.00lakhs (PY ` 62,500.00 lakhs) on account of outstanding Secured Redeemable Non- ConvertibleDebentures(NCD’s)of`100,000.00lakhs(PY`50,000.00lakhs).
28. CSR Expenses
Duringtheyear,`300.54lakhshasbeenspenttowardsCSRactivitiesintermsofSection135oftheCompaniesAct,2013andCompanies(CorporateSocialResponsibilitypolicy)Rules,2014.DetailsofCSRexpensesfortheyearareasunder:
Sr. No. Particulars Amount (` in lakhs)
1 ContributiontoPrimeMinistersReliefFund 294.54
2ContributiontoothercharitableorganisationseligibleforCSRpurpose
06.00
Total CSR Expenses 300.54
30. ThegratuityliabilityoftheemployeesiscoveredbyaGroupGratuitySchemeoftheLifeInsuranceCorporationofIndia.ThedisclosureasrequiredbyAccountingStandard-15“EmployeeBenefits”issuedbytheInstituteofCharteredAccountantsofIndiaisasunder.
Assumptions 2014-15 2013-14
Mortality rate LIC(1994-96)Ult. LIC(1994-96)Ult.Interest/DiscountRate 8.00%-8.70% 8.00%-8.05%RateofreturnofPlanAssets 8.00%-8.70% 8.00%SalaryEscalation 5-10% 5-10%
(`inlakhs)Gratuity (2014-15) Gratuity (2013-14)
Changes in present value of obligationOpeningDefinedBenefitObligation 98.74 69.48InterestCost 7.88 5.39Current Service Cost 16.87 17.82Actuarial(Gains)/Losses 3.27 (4.85)BenefitsPaid (8.68) 10.90Closing Defined Benefit Obligation 118.08 98.74
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED MARCH 31, 2015
STCI FINANCE LIMITED
(Formerly known as Securities Trading Corporation of India Limited)
179
Changes in the fair value of plan assetsFairvalueofplanassetsatbeginningofyear 72.83 56.06Transferinoffunds 0.00 4.19Expectedreturnonplanassets 5.91 5.32Contributions 12.90 11.77Benefitspaid (8.68) (4.50)ActuarialGains/(Losses) 0.32 (0.01)Fair value of plan assets at the end of the year 83.29 72.83 Actuarial Gain/ (loss) recognisedActuarialGain/(Loss)fortheyear-obligation (3.27) (10.55)ActuarialGain/(Loss)fortheyear-planassets
0.32 (0.04)
Net Actuarial Gain/ (Loss) recognised for the year (2.95) (10.59)Amount to be recognised in Balance SheetPresentvalueofobligationasattheendofthe year
118.08 98.74
Fairvalueofplanassetsasattheendoftheyear 83.29 72.83Funded status (34.79) (25.91)Net Asset recognised - Prepaid / (provisions) (34.79) (25.91)Expenses Recognised in Profit and Loss accountCurrent Service Cost 16.87 17.82InterestCost 7.88 5.39Net Actuarial loss recognised in the year 2.95 10.56Expectedreturnonplanassets (5.91) (5.32)Expenses recognised in Profit & Loss Account 21.79 28.45
Leave Encashment: Provisionof`49.17lakhs(PY`4.05lakhsreversal)hasbeenmadeduringtheyearforlongtermleaveencashmentonactuarialvaluationbasis.Provisionof`5.19lakhs(Previousyear `6.18lakhsreversal)hasbeenmadeduringtheyearonaccountofshorttermcompensatedabsences.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED MARCH 31, 2015
STCI FINANCE LIMITED
(Formerly known as Securities Trading Corporation of India Limited)
180
31. ThedetailsofprovisionsasperAS29–Provisions,ContingentLiabilitiesandContingentAssetsareas under
(` inlakhs)
Stamp Duty PLVP *
Opening Balance as at April 01, 2014 308.88 644.71
Additions 28.36 603.70
Utilisation 0.00 379.57
Reversal 1.26 177.48
Closing Balance as at March 31, 2015 335.98 691.36
*PerformanceLinkedVariablePay
ProvisionforstampdutyismadeforstampdutypayableunderBombayStampAct,1958inrespectof direct deals forNon SLR transactions. Provision of`603.70 lakhs (PY`500.00 lakhs) ismadeduringtheyearforpaymentofperformancelinkedvariablepay.
32. During the year, 1,60,00,000 shares of`10/- each of STCI PrimaryDealer Limited (100%whollyownedsubsidiary)weresurrenderedunderbuybackscheme@`23.32/-pershareresultingintoexceptionalgainof`2,131.20lakhs.However,thesamehasbeeneliminatedduringconsolidationasinter-companyadjustment.TaxonDistributedIncomepaidforbuybackofsharesbySTCIPDof`482.93lakhshasbeenclubbedundercurrentyear’staxexpense.
33. FiguresareroundedofftothenearestLakhRupees.Asaresult,adjustmentshavebeenmadeinthelastdecimalsintheindividualheadsofcertainaccountstoavoiddifferencescausedbyroundingoffofthesefiguresascomparedtototalsandsub-totals.
Figures pertaining to the subsidiary companies and previous year have been reclassified/regroupedwherevernecessarytobringtheminlinewiththeparentCompany’scurrentyearsfinancialstatements.prt
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED MARCH 31, 2015
ForandonbehalfofA. J. Shah & Co.Chartered Accountants FirmRegistrationNo.109477W
Devendra J. Shrimanker Partner MembershipNo.41920
Mumbai April 28, 2015
On behalf of the Board of Directors
Mrs. V.R. Iyer Chairperson
T.C. Venkat Subramanian Director
S. Ravi Director
S. Venkateswarlu ManagingDirector
Kamlesh Rathi ChiefFinancialOfficer
Suparna Sharma Company Secretary
MumbaiApril 28, 2015
STCI FINANCE LIMITED
(Formerly known as Securities Trading Corporation of India Limited)
181
CONSOLIDATED CASH FLOW STATEMENTS FOR THE YEAR ENDED MARCH 31, 2015
ParticularsFor the year
endedMarch 31, 2015
For the year ended
March 31, 2014
A. CASH FLOW FROM OPERATING ACTIVITIES
Net(Loss)/Profitbeforetaxandextraordinaryitems 32,194.55 23,518.52
Adjustmentsfor:
Depreciation 261.22 305.88
(Profit)/Lossonsaleoffixedassets (0.54) 0.74
(Profit)/LossonsaleofInvestments (797.01) (356.96)
Interestandotherincomeoninvestments (7,203.89) (6,927.09)
ProvisionforWealthTax 5.81 5.88
Dividendoninvestments (193.51) (112.08)
Amortisationofpremiumoninvestments 136.81 159.78
Provision against loans and advances 1,073.56 999.58
(6,717.55) (5,924.27)
OperatingProfit/(loss)beforeworkingcapitalchanges 25,477.00 17,594.25
Changes in Working Capital:
Increase/(Decrease)intradepayable 45.68 (17.87)
Increase/(Decrease)inprovisions 9,047.01 7,745.70
Increase/(Decrease)inothercurrentliabilities 5,024.69 (734.78)
Decrease/(Increase)inlongtermloanandadvances (50,779.55) (42,063.49)
(Increase)/Decreaseinothernoncurrentassets 758.66 (624.19)
Decrease/(Increase)inshorttermloanandadvances (44,189.89) (57,790.77)
Decrease/(Increase)intradereceivables 276.94 (252.10)
Decrease/(Increase)ininventories (167,767.30) 10,530.63
Decrease/(Increase)inothercurrentassets (3,145.50) 329.33
(250,729.26) (82,877.54)
CASH FLOW FROM / (USED IN) OPERATING ACTIVITIES (225,252.26) (65,283.29)
Less:TaxesPaid (11,424.59) (8,382.52)
NET CASH FLOW FROM / (USED IN) OPERATING ACTIVITIES (236,676.85) (73,665.81)
(`inlakhs)
STCI FINANCE LIMITED
(Formerly known as Securities Trading Corporation of India Limited)
182
CONSOLIDATED CASH FLOW STATEMENTS FOR THE YEAR ENDED MARCH 31, 2015
ParticularsFor the year
endedMarch 31, 2015
For the year ended
March 31, 2014
B. CASH FLOW FROM INVESTING ACTIVITIES
Purchaseoftangible/intangibleassets (72.57) (55.33)
Saleoftangible/intangibleassets 0.54 5.96
PurchaseofInvestments (117,617.03) (120,265.65)
SaleofInvestments 154,792.10 98,682.95
Dividendreceived 193.51 112.08
Interestreceived 7,203.89 6,927.09
NET CASH FLOW FROM / (USED IN) INVESTING ACTIVITIES 44,500.44 (14,592.90)
C. CASH FLOW FROM FINANCING ACTIVITIES
Paymentofdividend(includingDDT) (3,556.65) (3,556.65)
Funds borrowed 189,813.19 92,119.45
CSRExpenses (300.54) 0.00
NET CASH FLOW FROM / (USED IN) FINANCING ACTIVITIES 185,956.00 88,562.80
NET INCREASE / (DECREASE) IN CASH & CASH EQUIVALENTS (A+B+C)
(6,220.41) 304.09
Cash and Cash equivalents at beginning of period 42,250.60 41,946.51
Cash and Cash equivalents at end of period 36,030.19 42,250.60
Preparedasper“IndirectMethod”asprescribedbyAccountingStandard-3(revised)“CashFlowStatements”
Asperourattachedreportofevendate
ForandonbehalfofA. J. Shah & Co.Chartered Accountants FirmRegistrationNo.109477W
Devendra J. Shrimanker Partner MembershipNo.41920
Mumbai April 28, 2015
On behalf of the Board of Directors
Mrs. V.R. Iyer Chairperson
T.C. Venkat Subramanian Director
S. Ravi Director
S. Venkateswarlu ManagingDirector
Kamlesh Rathi ChiefFinancialOfficer
Suparna Sharma Company Secretary
MumbaiApril 28, 2015
(`inlakhs)
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STCI FINANCE LIMITED
STCI PRIMARY DEALER LIMITED
Annual Report For The Year Ended
31st March, 2015
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01 Directors’ Report 186
02 Auditors’ Report 215
03 Auditors’ Report to Directors 218
04 Balance Sheet 219
05 ProfitandLossStatement 220
06 SchedulesformingpartoftheAccounts 221
07 SignificantAccountingPoliciesandNotestoAccounts 241
08 CashFlowStatement 261
Contents
III. STCI PRIMARY DEALER LIMITED
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DIRECTORS’ REPORT
TO THE SHAREHOLDERS OF STCI PRIMARY DEALER LIMITED (CIN:-U67110MH2006PLC165306)
YourDirectorsarepleasedtopresenttheNinthAnnualReporttogetherwiththeAuditedAccountsoftheCompanyfortheYearendedMarch31,2015.
1. FINANCIAL RESULTS
TheFinancialperformanceoftheCompanyfortheyearendedMarch31,2015isasunder:-
(`inlakhs)
Particulars March 31, 2015 March 31, 2014Total Revenue 41,328.59 28,909.62Total Expenses 28,167.43 19,934.14ExceptionalItem(ProfitonSaleofFixedAssets) 0.31 0.49Profit(+)/loss(-)beforeTax 13,161.47 8,975.48Provisionforcurrentyearanddeferredtax 4,610.26 3,147.02Prior period expenses 0.64 0.08Short/(Excess)ProvisionforTaxforearlieryears 0.12 26.53TaxonDistributedIncomeonBuybackofShare 482.93 NilProfit(+)/loss(-)afterTax 8,067.52 5,802.34AppropriationforCSRExpenditure 92.54 NilTransfertoStatutoryReserve* 1,613.50 1,160.46TransfertoReserves(ProfitonSaleofHTMSecurities) 1,991.11 NilNetProfit/(NetLoss)Forthecurrentyear 4,370.37 4,641.88Balanceinprofit&lossaccountbroughtforwardbalance 7,523.89 2,822.01(-)PremiumonBuyback 2,131.20 Nil(-)TransfertoCapitalRedemptionReservestowardsbuybackofShares
1,600.00 Nil
(-)DepreciationchargedtoRetainedEarning 9.31 NilInterimDividend Nil NilTaxonInterimDividend Nil NilBalance Carried to the Balance Sheet 8,153.75 7,523.89
∗CreatedpursuanttoSection45I–CofReserveBankofIndiaAct,1934asamendedinJanuary1997.
YourDirectorsarepleasedtoinformthattheCompanyhasdeliveredarobustbusinessperformance.YourDirectorstakepleasureinreportingthattheCompanyhasmadeanetprofit(ProfitAfterTax)of`80.67Crforthefinancialyear2014-2015asagainst`58.02Crinthepreviousyeari.e.2013-2014.
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2. THE ECONOMY
FollowingtherevisionofNationalAccountsseriesinJan-2015,scopeandcoverageofGDPcomputationwaswidenedwhichprovidedsignificantboosttothegrowthnumbers.FromGDPgrowthof5.1%inFY13,growthsurged to6.9% inFY14andadvanceestimateshavepeggedgrowthat7.4% inFY15.Thebiggestboosttooverallgrowthimpulsescamefromkeysectorslikeelectricityandrelatedutilityservicesandfinancial,realestateandprofessionalservices.However,thisstrongrevivalassuggestedbyrevisedGDPnumbershasbeenmetwithlotofskepticismasitdoesnotcorroboratewithindicatorslikePMI,IIP,corporateearningsandoutputgap.
TheCPIinflationtrajectory,alongwithNationalAccounts’series,toounderwentrevisionofthebaseyear from2010to2012.Followingrebasingofseries, the inflationtrajectorypresents fairlybenignoutlook.HeadlineCPIinflationmoderatedtoanaverage6%undernewseriesinApr-FebFY15periodfrom9.6%underpreviousseries inApr-FebFY14period. In linewiththeflexible inflationtargetingmechanismadoptedbyRBI,aMonetaryPolicyFrameworkwassignedinFebruary2015betweentheGovernmentandRBI,whereinRBIwillendeavortobringdownheadlineCPIinflationto4%+/-2%forFY17andsubsequentyears.
Fig 1: Sustained moderation in inflation (%)
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AfternotingalarmingnumbersinmidJul-2013,risksofburgeoningtwindeficitshaveabatedsubstantiallyduringthecourseofFY15.WithGovernmentfirmlyonpathoffiscalconsolidation,fiscaldeficit forFY15waspeggedat4.1%ofGDPmuchlowerthan4.6%ofGDPinFY14.Whilesomeconcernspersistedoverrevenueshortfallparticularlydisinvestmentreceiptsandtaxcollection,overallfiscalaccountwasmanagedonaccountofwindfallgainsfromreductioninthepetroleumsubsidyconsequentuponslumpinglobalcrudepricescoupledwithexpenditurerationalization.
OnBalanceofPayments’(BoP)front,externalsectorresilienceimprovedonaccountoflowertradedeficitbringingdownoverallCurrentAccountDeficit(CAD)tosustainablelevels.IntermsoffinancingofCAD,healthyflowsonthecapitalaccountfrontshieldedexternalsectorfromsubstantialvulnerabilities.CAD forApr-DecFY15periodnarrowedtoUSD26.2Bn fromUSD31.1Bn inApr-DecFY14period.OverallreserveaccretioninthesameperiodsurgedtoUSD31.3BnfromUSD8.4Bnpreviousyear.
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Fig 2: India’s Foreign Exchange Reserves rose to record high (USD Bn)
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3. DEVELOPMENTS IN MONEY AND SECURITIES MARKET
Fig 3: 10Y benchmark yield trajectory (%)
TheinterimUnionBudgetFY15maintainedthefiscaldeficittargetat4.1%ofGDP.Thegrowthestimatewasmaintainedbetween5.4%-5.9%whileitwasexpectedthatinflationwillmoderate.InthemonthofJuly2014,RBInotifiedthetweakingofFIIgiltinvestmentlimits.GiltinvestmentlimitsforFII/QFI/FPIwasenhancedfromUSD20BntoUSD25BnwithcorrespondingreductioninlimitforlongterminvestortoUSD5BnfromUSD10Bn.Inarelateddevelopment,RBIinitsFebruary2015policy,allowedlongtermforeigninvestorstoreinvestcouponsinG-Secevenwhentheexistinglimitwasfullyutilized.
On themoneymarket front,RBI announced revised LiquidityManagement Framework inorder toensureflexibilityandtransparency in liquiditymanagementoperations.Underthenewframework,variable14daytermrepoauctionwillbeconductedfourtimesinafortnightequivalenttoone-fourthof 0.75% of NDTL. Additionally, overnight variable rate repo and reverse repo auctions would beconductedbasedonassessmentofliquidityconditions.
OntheMonetaryPolicyconduct,RBImaintainedreporateat8%fromJanuary2014toJanuary2015.Intheinterim,RBIgraduallyreducedSLRrequirementforbanksunderthreetranchesby50bpseachfrom23%ofNDTLto21.5%ofNDTLinJune2014,August2014andFebruary2015policies.InAugust
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2014Policy review,SLRholdingunderHTMcategory forbankswas reducedby50bps from24.5%ofNDTLto24%.InSeptember2014Policyreview,RBIlaidouttheroadmapforgradualreductioninceilingonSLRsecuritiesunderHTMcategory from24%to22% inaphasedmannertillSeptember2015.Additionally,RBIallowedbankstoincludeG-Secheldbythemuptoanother5%ofNDTLwithinmandatorySLR requirementas Level1HighQuality LiquidAssetunderBasel III LiquidityCoverageRationorms.
Acting out of the scheduled Policy review dates, RBI slashed repo rate in two tranches by 25 bpseachinJanuary2015andMarch2015,bringingthepolicyreporateto7.5%from8%.Initsforwardguidance,RBIhasindicateditwillremainvigilantonincomingdataandfurtherspaceformonetaryaccommodationwillopenupcontingentuponeasingofsupplyconstraints,availabilityofkeyinputslikepower,land,minerals,infrastructure,continuingprogressonhighqualityfiscalconsolidation,passthroughofpreviousratecutsintolendingrates,monsoonconditionsanddevelopmentsininternationalenvironment.
FY15markedtheinflectionpointfordomesticinterestratecycle.TheApril–December2014periodsawstatusquoonpolicyrates,inviewofevolvinggrowth-inflationdynamics.Governmentbondyields,however,notedseculardownwardtrajectoryonaccountofimprovedmacroeconomicfundamentalsasevincedbyfallinginflation,politicalstability,fiscalprudence,stableexchangerateandplungingglobalcrudeoilprices.Benefitingfromtheconfluenceofaforementionedfactorsalong-withtwointerestratecuts,benchmark10YyieldendedFY15at7.75%comparedto8.96%atthestartofyear.
4. OPERATIONS REVIEW
(i) Financial Performance
Theperformanceof theCompanycontinued to remainconsistentwithupward trend inprofitonyearonyearbasis,despite thechallengesat themicroandmacro level.TheCompanyyetagaindeliveredstrongfinancialresultandhasmadeanetprofit(ProfitAfterTax)of`80.67Crfor FY2015.TheCompanydelivered robustfinancialnumbersdespite the fact that theoverallbusinessenvironment,globalaswellasdomestic, continued tobechallenging for thecurrentyear.YourDirectorsdonotrecommendanydividendforthecurrentyear.
(ii) Performance of the Company as Primary Dealer in Government Securities
TheperformanceoftheCompanyasaPrimaryDealerduringtheyearunderreviewissetoutinAnnexure-IannexedtotheReport.Asagainstthestipulatedminimumsuccessratioof40%,theCompanyachievedsuccessratioinrespectofbidstenderedforprimaryissuesofTreasuryBillsat56.37%.TheCompany’s total turnover ratiowas950times inGovernmentdated securitiesand94.11timesinTreasuryBillsasagainstthestipulatedminimumratioof5timesand10timesrespectivelyundertheRBI’sguidelinesforPrimaryDealersinGovernmentsecurities.Onoutrightbasis, the turnover ratiowas678.14times inGovernmentdatedsecuritiesand22.09times inTreasuryBillsasagainsttheprescribedminimumof3timesand6timesrespectively.
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(iii) Risk Management
TheCompanyhasinplaceacomprehensiveBusinessRiskandInvestmentPolicytomonitormarket,credit, liquidityandoperational risksassociatedwiththebusinessoperationsof theCompany.TheCompanyusesValue-at-Risk(VaR)methodologyformeasuringandmonitoringmarketrisksassociatedwith itsportfolio anduses stress-testing tools toassess the impactof interest ratemovements on the portfolio. The risk management function of the Company is periodicallyreviewedbytheRiskManagementCommitteeoftheBoard.
The Company also has an ALCO Committee of executives of the Company comprising of theManagingDirectorandSeniorManagementoftheCompany.TheCommitteefunctionsundertheguidanceanddirectionsoftheBoardofDirectorsoftheCompanyaswellastheRiskManagementCommittee.
(iv) Internal Audit and Control Systems
For the period under review, the Company appointed M/s. Devdhar Joglekar & Srinivasan,CharteredAccountants,astheCompany’sInternalandConcurrentAuditors.Thescopeoftheirauditincludedreviewofadequacyandefficacyoftheinternalcontrolsystemsandproceduresanddeviations, ifany,fromgenerallyacceptedbestpractices,reviewoftheCompany’scompliancewithapplicablelawsandregulationsincludingtheguidelinesissuedbyRBIandotherstatutorybodies.M/s. Devdhar Joglekar& Srinivasan, Chartered Accountantswere also entrustedwithworkofConcurrentauditofallmoneyandsecuritiesmarkettransactions.TheAuditCommitteeaswellaswiththeBoardofDirectorsinteractsonaregularbasiswiththeInternalandConcurrentAuditortoensurehavingadequateinternalcontrolsandchecks.
(v) Regulatory Compliance
TheCompanyhascompliedwithalltheapplicableguidelinesprescribedbyRBIforthePrimaryDealersandNBFCsregardingaccountingstandards,incomerecognition,valuationofsecurities,capitaladequacyetc.
(vi) Credit Rating
TheCompanyhasobtainedthehighestcreditratingsofA1+fromratingagenciesICRAfor`400 Cr andfromCRISILfor`200Crforitsshort-termdebtprogramme.
(vii) Economic – Research
TheCompanyhasadedicatedmacroeconomicanddebt researchdeskwhich releases reportsat regular intervals covering careful study and in-depth analysis of economic developments,eventsandexpectationsofvariouseconomiceventsfortheCompany’svaluedclientsandmarketparticipants.Otherregularresearchcontributionsincludeseriesofreportsintheformofdailyandweeklydebtmarketupdatesandfortnightlyeconomicupdates.ItalsoreleasesperiodicreportssuchasMonetaryPolicyexpectations,MonetaryPolicyreview,reviewoftheUnionBudgetandoccasionalwrite-upsonissuesoftopicalinterest.
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(viii) IT Technical Committee
The Company has an IT Technical Committee which is entrusted with the responsibility ofmonitoringtheITsystemsadequacyandcompatibilityaswellasadvisingonthetimelyupgradeoftheITsystemsthatareinstalledbytheCompanyinlinewiththeCompany’sdynamicbusinessrequirement.TheITTechnicalCommitteeoftheCompanyplaysapioneerroleinensuringthattheCompanyhasarobustITsysteminplacewithnecessarychecksandbackups.
5. OUTLOOK FOR THE CURRENT YEAR
In faceofevolvingdomesticand internationaldevelopments,FY16presentschallengesonmultiplefronts.Ontheglobalfront,thekeyuncertaintystillremainsthetimingandmagnitudeofratehikebyUSFed.EmergingmarketeconomiesarelikelytobevulnerabletoheavyoutflowswhentheUSFedeventuallyexitsitsextraordinarymonetarypolicystance.Impactofthisimminentratehikeispartiallyexpectedtobeoffsetbyaccomodativemonetarypolicystanceofothercentralbanks-notablyECB,BoJandPBOC.Anotherriskthatneedstobemonitoredisareversaloflowcommodityprices’cycle.Anysharppickupincrudeoilpricesisalsolikelytohaveabearingonglobaleconomies.
Onthedomesticside,keyshort-termuncertaintiesincludemonsoonconditionsanditslikelyimpacton trajectoryof inflation,qualityoffiscal consolidationandensuring sustenanceofexternal sectorstrength.Growthislikelytopickupfrom7.4%toaround7.5%-8%intheupcomingyear.HeadlineCPIinflationislikelytoremainrange-boundwithlikelihoodoffurthersofteningcontingentonfavorablemonsoonconditions.
The overall BoP outlook appears relatively comfortable. Narrowed trade deficit, stable exchangerateandrobustforeignexchangereserveaccretionbodeswellfortheexternalsectoroutlook.WithlikelihoodofCADremainingbetween1%-1.5%ofGDPforFY15,futurecoursewillbecontingentonmeasuresongoldimportandcrudeoilpricelevel.AbilitytofinancetheCADwillhingeonrolloutofreformsbyGovernmenttoattractforeigninvestors,domesticstabilityandoverallgrowthdynamics.
KeepinginviewtheabovefactorstheCompanyholdsacautiousviewofthemarketforthecurrentyear. TheCompany, as always, shall strive toensure that all thepossiblemarketopportunities arecapitalizedbytheCompany.
6. COMPOSITION OF BOARD
As onMarch 31, 2015, the Board comprised of Seven Directors. The Board includes IndependentDirectors,Non-ExecutiveDirectorsandaManagingDirectorasunder:-
- Smt.VRIyer,Non-executiveDirector,Chairperson
- Shri.SRavi,IndependentDirector
- Shri.VSridar,IndependentDirector
- Shri.GNarayanan,IndependentDirector
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DIRECTORS’ REPORT
- Ms.SonaliSinha,IndependentDirector/AdditionalDirector
- Shri.SVenkateswarlu,Non-executiveDirector
- ShriPradeepMadhav,ManagingDirector
Shri. RV Joshi,Non-executiveDirector, steppeddown from theBoardof theCompanywith effectfromSeptember08,2014.TheBoardacknowledgesandplacesonrecorditsdeepappreciationforthecontributionmadebyShri.RVJoshiduringhistenurewiththeCompany.
TheBoardmetfivetimesduringtheyearunderreview.
Date of Board Meeting April 26, 2014
August 07, 2014
November 11, 2014
February 10, 2015
March 24, 2015
Details of Directors
1 Smt.VRIyer
2 Shri.SRavi
3 Shr.VSridar
4 Shri.RVJoshi x CeasedtobeDirectorfromSeptember08,2014
5 Shri.GNarayanan
6 Ms.SonaliSinha InductedonBoardfromFebruary10,2015
7 Shri.SVenkateswarlu
8 ShriPradeepMadhav
TheCompaniesAct,2013andtherules framedthereto (“Act”)were implementedduring theyear.Asper the requirementsof theAct, theCompanywas required toappoint/identifyatleast two (2)IndependentDirectors(ID’s).InlinewiththesaidrequirementsbelowDirectorswereappointedasID’saswellasanadditionalIndependentDirectorwasalsoappointedduringtheyear:-
- Shri.SRavi,IndependentDirector
- Shri.VSridarIndependentDirector
- Shri.GNarayananIndependentDirector
- Ms. Sonali Sinha, appointed as IndependentDirector andAdditionalDirector on February 10,2015
Ms.SonaliSinhahasover18yearsofexperienceacrossthecorporateandsocialsectors.Ms.SinhawastheCEOofDignityFoundation,anNGOthathasbeenworkingforseniorcitizensforover19years.Prior to thisshehas16yearsof investmentbankingexperienceacross IDFCCapital,Ernst&YoungandSBICapitalMarkets.Ms.SonaliwasDirector-InvestmentBankingatIDFCCapitalandwasleadingfinancialservicesandhealthcaretransactions.Ms.SonaliisaFICCIYoungLeaderandisontheSteering
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CommitteeforaKnowledgePaperon‘OrganizingforCorporateSocialResponsibilityinIndia’.SheisanMBAfromXLRI,JamshedpurandanEconomicsgraduatefromLadyShriRamCollege,DelhiUniversity.Ms.SinhahasrichexperienceisCSRactivityaswellasininvestmentbanking.
The Company has received Declaration of Independence from the Independent Directors of theCompany as per sub-section (6) of Section 149 of the Companies Act, 2013 and the rules framedthereto.
InaccordancewiththeprovisionsoftheActandtheArticlesofAssociationoftheCompanyShri.SVenkateswarlu retiresby rotationat theensuingAnnualGeneralMeetingandbeingeligible,offershimselfforre-appointment.
7. COMMITTEES OF THE BOARD
TheCommitteesoftheBoardplayacrucialroleandhavebeenconstitutedtodealwithspecificareas/activitieswhichconcern theCompanyandneedacloser review.TheBoardCommitteesaresetupundertheformalapprovaloftheBoardofDirectorstocarryoutclearlydefinedroles.
TheCompanyhasfollowingCommitteesoftheBoard:-
(i) Audit Committee
TheAuditCommitteeoftheBoardcomprisesofIndependentDirectorsoftheCompanyhavingknowledge of finance and accounts namely Shri S Ravi (Chairman), Shri V Sridar and ShriGNarayanan.During the year the Committeemet fivetimes. Shri. R V Joshi pursuant to hisresignationfromtheBoardofDirectorsoftheCompanyduringtheyear,ceasedtobethememberoftheAuditCommittee.
ThescopeandfunctionsoftheAuditCommitteeincludesthefollowing
- reviewoftheStatutoryandInternalAuditors’reports
- monitortheadequacyoftheinternalcontrolsystemandinternalauditfunction
- reviewthecompany’sfinancialmanagementpolicies
- discussionswiththeInternal,ConcurrentandStatutoryAuditorsasandwhennecessary/required
- recommendingappointment, remunerationandtermsofappointmentofauditorsof theCompany;
- reviewingandmonitoringtheauditor’sindependenceandperformance,andeffectivenessofauditprocess;
- examiningthefinancialstatementandtheauditors’reportthereon;
- approving or any subsequentmodification of transactions of the company with relatedparties,ifany;
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- scrutinizinginter-corporateloansandinvestments,ifany;
- valuationofundertakingsorassetsofthecompany,whereveritisnecessary;
- evaluationofinternalfinancialcontrolsandriskmanagementsystems;
- anyotherapplicablemattersasspecifiedundersection177oftheCompaniesAct,2013andtherulesframedtheretoorasmaybedelegatedbytheBoardinthisregard
In addition to quarterlymeetings for consideration of financial results,meetings of theAuditCommitteearealsoconvened,asandwhenrequired,forreviewofvariousbusinesses/functionalaspectsoftheCompany,businessriskassessment,internalaudit,etc.
(ii) Risk Management Committee
The Risk Management Committee of the Board Comprises of Independent Directors of theCompanynamelyShri.VSridar(Chairman)andShriGNarayanan.Duringtheyear,Shri.RVJoshipursuanttohisresignationfromtheBoardofDirectorsoftheCompany,ceasedtobethememberoftheRiskManagementCommittee.TheCompanyhasinplaceadetailedBusinessInvestmentandRiskPolicy,whichisreviewedatregularintervalsandmodified,ifrequired,inordertoalignwiththebusinessdynamicsoftheCompany.TheRiskManagementCommitteemeetsatregularintervals.During theyearunder review, theCommitteemet fourtimes.Thescopeof theRiskManagementCommitteeincludesthefollowing
- reviewcompliancewiththeapproved/statutoryriskpoliciesandparameters
- reviewriskpolicies,proceduresandreportingmechanisms
- reviewriskmanagementreportsonaperiodicbasisandsuggestmodificationtotheBusinessInvestmentandRiskPolicyoftheCompanyforsubmittingtotheBoardforfinalapproval
- allsuchactsandfunctionsasmaybedelegatedbytheBoardofDirectors
(iii) Nomination and Remuneration Committee
AsonMarch31,2015theNominationandRemunerationCommitteeoftheBoardcomprisesofShri.VSridar(Chairman),Smt.VRIyer,andShri.GNarayanan.TheNominationandRemunerationCommitteeplaysanactiveroleinHRdevelopment,PerformanceManagementandTalentRetentionand reviews HR policies on a regular basis. The scope of the Nomination and RemunerationCommitteeshallincludethefollowing;
- identifypersonqualifiedtobecomedirectorsandrecommendtotheBoardtheirappointmentandremoval
- identifypersonwhomaybeappointedinseniormanagementinaccordancewiththecriterialaiddownandrecommendtotheBoardtheirappointmentandremoval
- carryoutevaluationofeveryDirector’sperformance
- formulatethecriteriafordeterminingqualifications,positiveattributesandindependenceofadirectorandrecommendtotheBoardapolicy, relatingtotheremunerationforthe
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directors,keymanagerialpersonnelandotheremployees
- anyothermattersasspecifiedundersection178oftheCompaniesAct,2013andtherulesframedtheretoorasmaybedelegatedbytheBoardinthisregard
(iv) Corporate Social Responsibility (CSR) Committee
TheCompanysubscribestothevaluesofconcernandcare.TheCompany’sCSRpolicyhasbeenintended tomake amaterial, visible and lasting difference to the lives of the disadvantaged/underprivilegedsectionsofsociety.Further,inaccordancewiththerequirementsoftheCompaniesAct, 2013 and the rules framed thereto, the Company has a Corporate Social ResponsibilityCommitteeoftheBoardofDirectors.TheCommitteeconsistsofShri.SRavi(Chairman)andShri.GNarayananas committeemembers. The scopeof the committee is as prescribed in the actaswell as thosedelegatedby theBoard. Theprojects/beneficiariesof theCSR fundingof theCompanyareclearlylaiddownintheCSRpolicyoftheCompany,afterconsultationwiththeBoardofDirectors.
8. DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013
The Company has policy on Prevention of Sexual Harassment at Workplace. The policy aims atpreventionofharassmentofemployeesandlaysdowntheguidelinesforidentification,reportingandpreventionofundesiredbehaviour.TheInternalComplaintsCommittee(ICC)hasbeensetup.TheICCisresponsibleforredressalofcomplaintsrelatedtosexualharassment.DuringtheyearendedMarch31,2015,theICChasnotreceivedanycomplaintspertainingtosexualharassment.
9. DIRECTORS RESPONSIBILITY STATEMENT
PursuanttoSection134(3)(c)oftheCompaniesAct,2013andtherulesframedtheretoandanyotherprovisions,ifany,theDirectorsconfirm:-
(a) thatinthepreparationoftheannualaccounts,theapplicableaccountingstandardshavebeenfollowedalongwithproperexplanationrelatingtomaterialdepartures;
(b) thatappropriateaccountingpolicieshavebeenadoptedandhavebeenappliedconsistentlyandjudgmentsandestimateshavebeenmadethatarereasonableandprudentsoastogiveatrueandfairviewofthestateofaffairsoftheCompanyattheendofthefinancialyearandoftheprofitandlossofthecompanyforthatperiod;
(c) that proper and sufficient care havebeen taken for themaintenanceof adequate accountingrecordsinaccordancewiththeprovisionsoftheActforsafeguardingtheassetsofthecompanyandforpreventinganddetectingfraudandotherirregularities;
(d) thattheannualaccountshavebeenpreparedonagoingconcernbasis;and
(e) thatsystemstoensurecompliancewiththeprovisionsofallapplicablelawsandthatsuchsystemshavebeenadequateandoperatingeffectively.
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10. AUDITORS
M/s Chandabhoy & Jassoobhoy, Chartered Accountants, Mumbai, ICAI firm registration number101647W,wereappointedasthestatutoryauditorsoftheCompany.
11. HUMAN RESOURCES
The Company’s HR function has been outsourced to M/s Cerebrus Consultants who provide HRsupport bywayof reviewof Company’sHRpolicies, compensation structure, key hiring plan, newemployeeselectionandon-boarding,skillandcapabilitybuildingforemployeesandotherregularHRmanagementactivities.
12. DISCLOSURE OF PARTICULARS
TheCompanyisaPrimaryDealerasdefinedandregulatedbytheReserveBankofIndiaandisnotamanufacturingCompany,hencetheparticularsrequiredtobedisclosedwithrespecttotheconservationofenergyandtechnologyabsorptionintermsofSection134(3)(m)oftheCompaniesAct,2013andtherulesframedtheretoarenotapplicabletotheCompany.
TheinformationrequiredpursuanttoSection134readwithrule5ofCompanies(AppointmentandRemuneration of Managerial Personnel) Rules, 2014 shall be provided upon request. In terms ofSection136oftheAct,thereportandaccountsarebeingsenttomembers,excludingtheinformationonemployee’sparticularswhichisavailableforinspectionbythemembersattheregisteredofficeoftheCompanyduringbusinesshoursonworkingdaysoftheCompanyuptothedateoftheensuingGeneralMeeting.InterestedmembersmaywritetotheCompany.
Therewerenoforeignexchangeearningsduringtheyear.ThedetailsoftheforeignexchangeoutgoappearatItemNo.19(b)(5)ofNote19intheNotesformingpartofaccounts.
13. RELATED PARTY TRANSACTION
Allrelatedpartytransactionsthatwereenteredintoduringthefinancialyearwereonarm’s lengthbasisandwereintheordinarycourseofbusiness.AllrelatedpartytransactionsareplacedbeforetheAuditCommitteeandtheBoardofDirectors.TherearenomateriallysignificanttransactionsmadebytheCompanywithPromoters,Directors,KeyManagerialPersonsoranyotherrelatedpartythatmayhaveapotentialconflictwiththeinterestoftheCompanyatlarge.relationshiportransactionsvis-à-vistheCompany.Detailsofcontractsorarrangementswithrelatedpartiesalongwithjustificationforenteringintotransactionsreferredtoinsub-section(1)ofsection188areannexedtotheReportasAnnexure II
14. VIGIL MECHANISM POLICY
TheCompanyhasestablishedavigilmechanismthroughtheauditcommittee,toaddresstheconcernsexpressed by the employees and other Directors. The Company has provided direct access to the
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ChairmanoftheAuditCommitteeonreportingissuesconcerningtheinterestsofco-employeesandtheCompany.TheCompanyhasformulatedaVigilMechanismPolicyinaccordancewiththerequirementsofSection177oftheCompaniesAct,2013andtherulesframedthereto.ThePolicyisavailableontheCompany’swebsitewww.stcipd.com.
15. POLICY ON NOMINATION & REMUNERATION OF DIRECTORS
The Company has formulated a policy in accordancewith the requirements of Section 178 of theCompaniesAct,2013andtherulesframedthereto.ThePolicyisavailableontheCompany’swebsitewww.stcipd.com.
16. CORPORATE SOCIAL RESPONSIBILITY POLICY AND DISCLOSURE
The Company has formulated a policy in accordancewith the requirements of Section 135 of theCompaniesAct,2013andtherulesframedthereto.DisclosuresunderCorporateSocialResponsibilityaspertheCompaniesAct,2013&Companies(CorporateSocialResponsibility)PolicyRules2014 isattachedasAnnexureIII.ThePolicyisavailableontheCompany’swebsitewww.stcipd.com.
17. EXTRACT OF ANNUAL RETURN IN FORM MGT-9
ExtractofAnnualReturninFormMGT-9inaccordancewiththeCompaniesAct,2013isattachedtotheReportasAnnexureIV
18. FORMAL ANNUAL EVALUATION
TheCompanyhasadoptedapolicyontheevaluationoftheperformanceoftheBoardofDirectorsandthatofitscommitteesandindividualdirectors.DuringtheFinancialYear2014-15,theCompanyhadundertakentheevaluationexerciseasstipulatedinaccordancewiththepolicyaswellasinthematterasprescribedundertheact.
19. SUBSEQUENT EVENTS
TherearenomaterialchangesandcommitmentsaffectingthefinancialpositionofthecompanywhichhaveoccurredbetweenMarch31,2015andthedateofthereport.
20. REGARDING KEY MANAGERIAL PERSONNEL
DuringtheFY2015theCompanyhas identifiedanddesignatedthefollowingastheKeyManagerialPersonnelof theCompany in linewith the requirementof theCompaniesAct,2013and the rulesframedthereto
Mr.PradeepMadhav,ManagingDirector Mr.MNSuresh,ChiefFinancialOfficer Mr.KalpeshMody,CompanySecretary
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21. EXPLANATION OR COMMENTS ON QUALIFICATIONS, RESERVATIONS OR ADVERSE REMARKS OR DISCLAIMERS MADE BY THE AUDITORS AND THE PRACTICING COMPANY SECRETARY IN THEIR REPORTS
Therewerenoadversecomments,qualificationsorreservationsmadeeitherbytheStatutoryAuditorsand Secretarial Auditors
22. SHARES
BUYBACKOFSHARES
The share capitaloftheCompany,authorisedaswellaspaidup,atthebeginningandattheendoftheyearisasunder;
Particulars As at March 31, 2015 As at March 31, 2014No. of Shares Amount No. of Shares Amount
AuthorisedEquitySharesof` 10/-eachfullypaidup
30,00,00,000 300,00,00,000.00 30,00,00,000 300,00,00,000
Issued,Subscribed&PaidupEquitySharesof` 10/-eachfullypaidup
15,00,00,000 150,00,00,000 16,60,00,000 166,00,00,000
Pursuant to RBI requirement and compliance thereof, the Company has bought back 1,60,00,000(OneCroreSixtyLakhs)fullypaidupequitysharesofthefacevalue`10/-eachtotheexistingEquityShareholdersoftheCompanythroughPrivateOffer,atapriceof`23.32/-(RupeesTwentyThreeandThirtyTwoPaisaOnly)perequityshareforanaggregateof`37,31,20,000/-(RupeesThirtySevenCroreThirtyOneLakhTwentyThousandonly)inaccordancewiththeprovisionsofSection68,69,70oftheCompaniesAct, 2013 readwith the rules framed thereto. The saidbuybackof shares constituted9.64%ofthetotalpaidupCapitalandfreereserves.
23. SUBSIDIARIES, JOINT VENTURES AND ASSOCIATE COMPANIES
TheCompanydoesnothaveanySubsidiary,JointventureorAssociateCompany.
24. PUBLIC DEPOSITS
During the year ended March 31, 2015 your Company has not accepted any deposits from thepublicwithinthemeaningoftheprovisionsoftheNon-BankingFinancialCompanies(ReserveBank)Directions,1998aswellaswithinthemeaningofChapterVoftheCompaniesAct2013andtherulesframedthereto.
DIRECTORS’ REPORT
STCI PRIMARY DEALER LIMITED
199
25. BRANCH OFFICES
TheCompanyhasbranchoffices inDelhi,BengaluruandKolkatawhichhavebeenmakingongoingeffortsforbusinessdevelopmentandprocuringbusinessfromPSUs,CommercialBanks,Co-operativeBanks,Corporates,MNCs,ProvidentFunds,PensionandGratuityFunds, InsuranceCompanies,etc.Theactivitiesoftheseofficesarebeingregularlyassessedandmonitored.
26. ACKNOWLEDGEMENT
YourDirectorsthankSTCIFinanceLimited(HoldingCompany),ReserveBankof India,SEBI,CCIL, itsBankers, other commercial and cooperative banks, financial institutions, mutual funds, insurancecompanies,corporatesandothercustomersfortheirbusinessandsupport.TheDirectorswouldalsoliketoplaceonrecordtheirappreciationofthededicatedperformancebytheofficersandstaffoftheCompany.
On behalf of the Board of Directors
Chairperson
MumbaiApril21,2015
DIRECTORS’ REPORT
STCI PRIMARY DEALER LIMITED
200
BIDDING IN THE PRIMARY MARKET AND TURNOVER IN THE SECONDARY MARKET*
(StockinFaceValue)(`inCrore)
2014-2015 2013-2014
Treasury Bills
Govt. Dated Securities
Treasury Bills
Govt. Dated Securities
1 AnnualBiddingCommitment 37,400 86,805 34,550 56,073
2 Bids Tendered 77,953 1,03,807 61,868 67,585
3 Bids Accepted 21,081 13,702 16,682 13,289
4 SuccessRatio% 56 NA 48 NA
5 SuccessRatiorequired% (asperguidelines)
40 NA 40 NA
A Primary Market
1 Subscription 21,081 13,702 16,682 13,289
2 Devolvement NA 697 NA 1,268
Total (1+2) 21,081 14,399 16,682 14,558
B Secondary Market
1 Outright 32,696 7,77,797 31,861 5,86,498
2 Repo 1,06,619 3,11,805 47,817 91,554
Total (1+2) 1,39,315 10,89,603 79,678 6,78,053
C Average Month End Stock
1 Total(IncludingRepoStock) 1,480 1,146 734 536
2 OwnStock(ExcludingRepoStock) 1,210 455 583 419
D Turnover Ratio
1 Total Turnover to Total Stock (RequiredRatio)
94(10times)
950(5Times)
108(10times)
1262(5Times)
2 OutrightTurnovertoOwnStock(RequiredRatio)
22(6times)
678(3times)
43(6times)
1092(3times)
* Decimalshavebeenroundedoff
On behalf of the Board of Directors
Chairperson
MumbaiApril21,2015
STCI PRIMARY DEALER LIMITED
201
Form No. AOC-2(Pursuant to clause (h) of sub-section (3) of section 134 of the Act and Rule 8(2) of the Companies
(Accounts) Rules, 2014)
Formfordisclosureofparticularsofcontracts/arrangementsenteredintobythecompanywithrelatedpar-tiesreferredtoinsub-section(1)ofsection188oftheCompaniesAct,2013includingcertainarmslengthtransactionsunderthirdprovisothereto
Sr. No Particulars Amount
1
Detailsofcontractsorarrangementsortransactionsnotatarm’slengthbasis
(a)Name(s)oftherelatedpartyandnatureofrelationship
NotApplicable
(b)Natureofcontracts/arrangements/transactions
(c)Durationofthecontracts/arrangements/transactions
(d) Salient terms of the contracts or arrangements or transactionsincludingthevalue,ifany
(e) Justification for entering into such contracts or arrangements ortransactions
(f)date(s)ofapprovalbytheBoard
(g)Amountpaidasadvances,ifany:
(h)Dateonwhichthespecialresolutionwaspassedingeneralmeetingasrequiredunderfirstprovisotosection188
2
Details ofmaterial contracts or arrangement or transactions at arm’slengthbasis
(a)Name(s)oftherelatedpartyandnatureofrelationship
ReferAnnexure A
(b)Natureofcontracts/arrangements/transactions
(c)Durationofthecontracts/arrangements/transactions
(d) Salient terms of the contracts or arrangements or transactionsincludingthevalue,ifany:
(e)Date(s)ofapprovalbytheBoard,ifany:
(f)Amountpaidasadvances,ifany:
On behalf of the Board of Directors
Chairperson
MumbaiApril21,2015
STCI PRIMARY DEALER LIMITED
202
DET
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STCI PRIMARY DEALER LIMITED
203
ANNUAL REPORT ON CSR ACTIVITIES
1. A brief outline of the company’s CSR policy, including overview of projects or programs proposed to be undertaken and a reference to the web-link to the CSR policy and projects or programs
TheCorporateSocialResponsibility(CSR)PolicyisavailableonthewebsiteoftheCompanywww.stcipd.com
2 . The Composition of the CSR Committee
Mr.SRavi,IndependentDirector Mr.GNarayanan,IndependentDirector Mr.PradeepMadhav,ManagingDirector
3. Average net profit of the company for last three financial years
TheAverageNetProfitforthepast3(three)FinancialYearswouldbeRs.4627.12(InLac).
4. Prescribed CSR Expenditure (two per cent. Of the amount as in item 3 above)
TheCompanyisrequiredtospendRs.92.54(InLac)towardsCSR.
5 . Details of CSR spent during the financial year
(a) Total amount to be spent for the financial year - Rs.92.54(InLac)towardsCSR.
(b) Amount unspent, if any - Nil
(c) Manner in which the amount spent during the financial year is detailed below
S. No. Particulars Amount 1 CSR Project or activity identified PrimeMinisterNationalReliefFund2 Sector in which the project is covered3 Project or programs
(1) local area or other(2) specify the state and district where projects or programs was undertaken
Pan India
4 Amount outlay (budget) project or programs wise Rs.92.54(InLac)5 Amount spent on the projects or programs
Sub heads:-(1) Direct expenditure on projects or programs (2) overheads
Rs.92.54(InLac)Nil
6 Cumulative expenditure upto the reporting period
Nil
7 Amount Spent:- Direct or through implementing agency
ContributionhasbeenmadetoPrimeMinisterNationalReliefFund
STCI PRIMARY DEALER LIMITED
204
6. In case the Company has failed to spend the two percent of the average net profit of the last three financial years or any part thereof, the Company shall provide the reasons for not spending the amount in its Board report–NotApplicableastheCompanyhasspenttheentireamounttowardsCSRthatwasrequiredtobespent.
7. A responsibility statement of the CSR Committee that the implementation and monitoring of CSR policy, is in compliance with the CSR objectives and Policy of the Company. – FormspartoftheCSRPolicy.
On behalf of STCI Primary Dealer Limited
Managing Director
April 21, 2015 Mumbai
On behalf of On behalf of Corporate Social Responsibility Committee The Board of Directors
Chairperson Chairperson
April 21, 2015 April 21, 2015 Mumbai Mumbai
STCI PRIMARY DEALER LIMITED
205
Annexure IV
Form No. MGT-9EXTRACT OF ANNUAL RETURN
as on the financial year ended on March 31, 2015[Pursuanttosection92(3)of the Companies Act, 2013 andrule12(1)oftheCompanies
(ManagementandAdministration)Rules,2014]
I. REGISTRATION AND OTHER DETAILS:
i) CIN U67110MH2006PLC165306
ii) Registration Date DateofIncorporation–October31,2006
iii) Name of the Company STCIPrimaryDealerLimited
iv) Category / Sub-Category of the Company CompanyhavingShareCapital
v) Address of the Registered office and contact details A/B1-801(A-Wing),8thFloor,MarathonInnova MarathonNextGenCompound,LowerParel Mumbai–400013 Tel:-022–66202200
vi) Whether listed company Yes / No No
vii) Name, Address and Contact details of Registrar and Transfer Agent, if any ShareproServicesIndiaPvt.Ltd. 13ABSamithaWarehousingComplex 2ndFloor,SakiNakaTelephoneExchangeLane Sakinaka,Andheri(East)Mumbai-400072
STCI PRIMARY DEALER LIMITED
206
II. PRINCIPAL BUSINESS ACTIVITIES OF THE COMPANY
Allthebusinessactivitiescontributing10%ormoreofthetotalturnoverofthecompanyshallbestated:-S. No. Name and Description of main
products / services NIC Code of the Product/
service % to total turnover of
the company 1 Primary Dealer, market maker for
government securities and as definedandregulatedbRBI.
6499 100%
III. PARTICULARS OF HOLDING, SUBSIDIARY AND ASSOCIATE COMPANIES -
S. N0 NAME AND ADDRESS OF THE COMPANY
CIN/GLN HOLDING/ SUBSIDIARY/ ASSOCIATE
% of shares held
Applicable Section
1 STCIFinanceLimited(erstwhileSecuritiesTradingCorporationofIndiaLimited))
U51900MH1994 PLC078303
Holding 100%* 2(46)
*includessharesheldbynominees
IV. SHARE HOLDING PATTERN (Equity Share Capital Breakup as percentage of Total Equity)
i) Category-wise Share Holding
Category of Shareholders
No. of Shares held at the beginning of the year
No. of Shares held at the end of the year %
Demat Physical Total % of Total
Shares
Demat Physical Total % of Total Shares
Change during the
yearA. Promoters (1)Indian a)Individual/HUF Nil Nil Nil Nil Nil Nil Nil Nil Nilb)CentralGovt Nil Nil Nil Nil Nil Nil Nil Nil Nilc)StateGovt(s) Nil Nil Nil Nil Nil Nil Nil Nil Nild)BodiesCorp. 165999994 6* 166000000 100 149999994 6* 150000000 100 Nil
e)Banks/FI Nil Nil Nil Nil Nil Nil Nil Nil Nilf)AnyOther…… Nil Nil Nil Nil Nil Nil Nil Nil NilSub-total (A)(1):- 165999994 6* 166000000 100 149999994 6* 150000000 100 Nil
(2)Foreigna)NRIs-Individuals Nil Nil Nil Nil Nil Nil Nil Nil Nilb)Other- Individuals
Nil Nil Nil Nil Nil Nil Nil Nil Nil
c)BodiesCorp. Nil Nil Nil Nil Nil Nil Nil Nil Nild)Banks/FI Nil Nil Nil Nil Nil Nil Nil Nil Nil
e) AnyOther…. Nil Nil Nil Nil Nil Nil Nil Nil Nil
Sub-total (A)(2):- Nil Nil Nil Nil Nil Nil Nil Nil NilTotal shareholding of Promoter (A)=(A)(1)+(A)(2)
165999994 6* 166000000 100 149999994 6* 150000000 100 Nil
STCI PRIMARY DEALER LIMITED
207
Category of Shareholders
No. of Shares held at the beginning of the year
No. of Shares held at the end of the year %
Demat Physical Total % of Total
Shares
Demat Physical Total % of Total Shares
Change during the
yearB.Public Share holding
1) Institutions
a) MutualFunds Nil Nil Nil Nil Nil Nil Nil Nil Nil
b) Banks/FI Nil Nil Nil Nil Nil Nil Nil Nil Nil
c) CentralGovt Nil Nil Nil Nil Nil Nil Nil Nil Nil
d) StateGovt(s) Nil Nil Nil Nil Nil Nil Nil Nil Nil
e) VentureCapital Funds
Nil Nil Nil Nil Nil Nil Nil Nil Nil
f) Insurance Companies
Nil Nil Nil Nil Nil Nil Nil Nil Nil
g) FIIs Nil Nil Nil Nil Nil Nil Nil Nil Nil
h) ForeignVenture Capital Funds
Nil Nil Nil Nil Nil Nil Nil Nil Nil
i) Others(specify) Nil Nil Nil Nil Nil Nil Nil Nil Nil
Sub-total (B) (1):- Nil Nil Nil Nil Nil Nil Nil Nil Nil
2. Non- Institutions
a) BodiesCorp. Nil Nil Nil Nil Nil Nil Nil Nil Nil
i) Indian Nil Nil Nil Nil Nil Nil Nil Nil Nil
ii) Overseas Nil Nil Nil Nil Nil Nil Nil Nil Nil
b)Individuals
i) Individual share holdersholding nominalshare capital upto Rs.1lakh
Nil Nil Nil Nil Nil Nil Nil Nil Nil
ii) Individual share holdersholding nominalshare capital in excess of Rs1 lakh
Nil Nil Nil Nil Nil Nil Nil Nil Nil
c) Others(specify) Nil Nil Nil Nil Nil Nil Nil Nil Nil
Sub-total (B) (2)Total Public Shareholding (B)= (B)(1)+ (B)(2)
Nil Nil Nil Nil Nil Nil Nil Nil Nil
C. Shares held by Custodian for GDRs & ADRs
Nil Nil Nil Nil Nil Nil Nil Nil Nil
Grand Total (A+B+C) 165999994 6* 166000000 100 149999994 6* 150000000 100 Nil*sharesheldbythenominees
STCI PRIMARY DEALER LIMITED
208
B. Shareholding of Promoters
S. No.
Share holder’s Name Shareholding at the beginning of the year Shareholding at the end of the year %
No. of Shares
% of total Shares of the
company
% of Shares Pledged/
encumbered to total shares
No. of Shares
% of total Shares of the
company
% of Shares Pledged/
encumbered to total shares
Change in shareholding
during the year
1 STCIFinanceLimited(erstwhileSecuritiesTradingCorporationofIndiaLimited)
16,59,99,994 100 Nil 14,99,99,994 100 Nil Nil
2 Mr.KamleshRathi* 01 0 Nil 01 0 Nil Nil
3 Mr.AlokeM.Prasad* 01 0 Nil 01 0 Nil Nil
4 Mr.PradeepMadhav* 01 0 Nil 01 0 Nil Nil
5 Mr.PrasannaPatankar* 01 0 Nil 01 0 Nil Nil
6 Mr.SVenkateswarlu* 01 0 Nil 01 0 Nil Nil
7 Ms.SuparnaSharma* 01 0 Nil 01 0 Nil Nil
Total 16,60,00,000 100 Nil 15,00,00,000 100 Nil Nil*sharesheldbythenominees
B. Change in Promoters’ Shareholding (please specify, if there is no Change)
AS PER ANNEXURE ‘’C’’
S.No.
Shareholding at the beginning of the year
Cumulative Shareholding during the year
No. of shares % of total shares of the
company
No. of shares % of total shares of the
companyAtthebeginningoftheyear 16,59,99,994 100% 16,60,00,000*+ 100%
DatewiseIncrease/DecreaseinPromotersShareholdingduringtheyearspecifying
1,60,00,000 1,60,00,000
The reasons for increase/decrease(e.g.allotment/transfer/bonus/sweatequityetc):
BuybackofShares
AttheEndoftheyear 14,99,99,994 100% 15,00,00,000*+ 100%*includessharesheldbynominees+TheCompanyisawhollyownedsubsidiaryofSTCIFinanceLimited
STCI PRIMARY DEALER LIMITED
209
C. Shareholding Pattern of top ten Share holders+ (other than Directors, Promoters and Holders of GDRs and ADRs):
AS PER ANNEXURE ‘’ D ‘’
Sl.No.
Shareholding at the beginning of the year+
Cumulative Shareholding during the year+
For Each of theTop10 Shareholders+
No. of shares % of total shares of the company
No. of shares
% of total sharesof the company
Atthebeginningoftheyear+ NotapplicableDatewiseIncrease/DecreaseinShareholdingduringtheyearspecifyingthereasonsforincrease/decrease(e.g.allotment/transfer/bonus/sweatequityetc):
Notapplicable
AttheEndoftheyear+ (or on the date ofSeparation,ifseparatedduringtheyear)
Notapplicable
+TheCompanyisawhollyownedsubsidiaryofSTCIFinanceLimited
D. Shareholding of Directors and Key Managerial Personnel:
AS PER ANNEXURE ‘’E’’
Sl.No.
Shareholding at the beginning of the year
Cumulative Shareholding during the year
For Each of the Directors and KMP
No. of shares % of total shares of the company
No. of shares % of total shares of the company
Mr.PradeepMadhav,ManagingDirector(holdsoneshareasanominee)
Atthebeginningoftheyear 1 0 1 0
DatewiseIncrease/DecreaseinShareholdingduringtheyearspecifyingthe reasons for increase/decrease(e.g.allotment/transfer/bonus/sweatequityetc):
NoChange
AttheEndoftheyear 1 0 1 0
STCI PRIMARY DEALER LIMITED
210
Sl.No.
Shareholding at the beginning of the year
Cumulative Shareholding during the year
For Each of the Directors and KMP
No. of shares % of total shares of the company
No. of shares % of total shares of the company
Mr.SVenkateswarlu,Director(holdsoneshareasanominee)
Atthebeginningoftheyear 1 0 1 0DatewiseIncrease/DecreaseinShareholdingduringtheyearspecifyingthe reasons for increase/decrease(e.g.allotment/transfer/bonus/sweatequityetc):
NoChange
AttheEndoftheyear 1 0 1 0Mr.PrasannaPatankar,DyManagingDirector(holdsoneshareasanominee)
Atthebeginningoftheyear 1 0 1 0
DatewiseIncrease/DecreaseinShareholdingduringtheyearspecifyingthe reasons for increase/decrease(e.g.allotment/transfer/bonus/sweatequityetc):
NoChange
AttheEndoftheyear 1 0 1 0
E. INDEBTEDNESS
Indebtedness of the Company including interest outstanding / accrued but not due for payment (Rs. in lacs)*
Secured Loans excluding deposits
Unsecured Loans
Deposits Total Indebtedness
Indebtedness at the beginning of the financial yeari) PrincipalAmount 1,78,893 61,910 Nil 2,40,804ii) Interestduebutnotpaid Nil Nil Nil Niliii) Interestaccruedbutnotdue 206 219 Nil 425Total (i+ii+iii) 1,79,099 62,129 2,41,229
Change in Indebtedness during the financial yearAddition 1,17,248 22,336 Nil 1,39,584Reduction Nil Nil Nil NilNet Change
STCI PRIMARY DEALER LIMITED
211
Secured Loans excluding deposits
Unsecured Loans
Deposits Total Indebtedness
Indebtedness at the end of the financial yeari) PrincipalAmount 2,96,141 84,246 Nil 3,80,388ii) Interestduebutnotpaid Nil Nil Nil Niliii) Interestaccruedbutnotdue 193 140 Nil 334Total (i+ii+iii) 2,96,334 84,386 3,80,722
*Decimalshavebeenroundedoff
XI. REMUNERATION OF DIRECTORS AND KEY MANAGERIAL PERSONNEL
A. Remuneration to Managing Director ,Whole-time Directors and/or Manager:Sl. no.
Particulars of Remuneration Name of MD / WTD / Manager
Total Amount
PradeepMadhav1 Grosssalary
(a)Salaryasperprovisionscontainedinsection17(1)ofthe Income-taxAct,1961
(b)Valueofperquisitesu/s17(2)Income-taxAct,1961
(c)Profitsinlieuofsalaryundersection17(3)Income-taxAct
62,89,517
39,600
Nil
62,89,517
39,600
Nil
2. StockOption NA NA3. SweatEquity NA NA4. Commission
- As%ofprofit- others,specify…
NilNil
NilNil
5. Others(PLVP)*+ 97,54,500 97,54,500
Total(A) 1,60,83,617 1,60,83,617
* PLVPtobepaidinstaggeredmannertillMay2017,subjecttothetermsandconditionsasperpolicy+ Subjecttoapplicabletaxdeduction
STCI PRIMARY DEALER LIMITED
212
B. Remuneration to other directors:
Sl.no.
Particulars of Remuneration Name of Directors Total Amount
Mr. R. V. Joshi
Mr. V Sridar
Mr. G Narayanan
Mr. S Ravi
Ms. Sonali Sinha
1. Independent Directors· Feeforattendingboard
committeemeetings· Commission· Others,pleasespecify
80000
NilNil
360000
NilNil
380000
NilNil
220000
NilNil
40000
NilNil
10,80,000
Total(1) 80000 360000 380000 220000 40000 10,80,000Mr.S.Venkateswarlu Ms.VRIyer
2. OtherNon-ExecutiveDirectors· Feeforattendingboard
committeemeetings· Commission· Others,pleasespecify
100000
NilNil
140000
NilNil
Total(2) 100000 140000 2,40,000Total(B)=(1+2) 13,20,000
C. REMUNERATION TO KEY MANAGERIAL PERSONNEL OTHER THAN MD / MANAGER / WTDSl.no.
Particulars of Remuneration Key Managerial Personnel
Dy. Managing Director
Company Secretary
CFO Total
1. Grosssalary(a)Salaryasperprovisionscontainedinsection17(1)
oftheIncome-taxAct,1961
(b) Valueofperquisitesu/s17(2)Income-taxAct,1961
(c) Profitsinlieuofsalaryundersection17(3)Income-taxAct,1961
38,73,750
11,23,119
Nil
10,02,722
Nil
Nil
28,31,558
Nil
Nil
77,08,030
11,23,119
Nil
2. StockOption Nil Nil Nil Nil
3. SweatEquity Nil NIL NIL NIL
4. Commission-as%ofprofit-others,specify…
NANil
NANil
NANil
NANil
5. Others(PLVP)*+ 67,50,000 5,85,281 43,39,854 116,75,135
Total 1,17,46,869 15,88,003 71,71,412 2,05,06,284
*PLVPtobepaidinstaggeredmannertillMay2017,subjecttothetermsandconditionsasperpolicy+Subjecttoapplicabletaxdeduction
STCI PRIMARY DEALER LIMITED
213
XII. PENALTIES/PUNISHMENT/COMPOUNDING OF OFFENCES:
Type Section of the Companies Act
Brief Description
Details of Penalty/Punishment/ Compounding fees imposed
Authority [RD/NCLT
/COURT
Appeal made, if any (give Details)
A. COMPANY
Penalty
NonePunishment
Compounding
B. DIRECTORS
Penalty
NonePunishment
Compounding
C. OTHER OFFICERS IN DEFAULT
Penalty
NonePunishment
Compounding
On behalf of the Board of Directors
Chairperson
April 21, 2015 Mumbai
STCI PRIMARY DEALER LIMITED
214
INDEPENDENT AUDITORS’ REPORT
To the Members of
STCI Primary Dealer Limited
REPORT ON THE FINANCIAL STATEMENTS
1. WehaveauditedtheaccompanyingfinancialstatementsofSTCIPrimaryDealerLimited,whichcomprisetheBalanceSheetasatMarch31,2015andtheStatementofProfitandLoss,theCashFlowStatementfortheyearthenended,andasummaryofsignificantaccountingpoliciesandotherexplanatoryinformation.
MANAGEMENT’S RESPONSIBILITY FOR THE FINANCIAL STATEMENTS
2. The Company’s Board of Directors is responsible for the matters stated in Section 134(5) of theCompaniesAct,2013 (“theAct”)withrespect to thepreparationof thesefinancial statements thatgiveatrueandfairviewofthefinancialposition,financialperformanceandcashflowsoftheCompanyin accordancewith the accounting principles generally accepted in India, including the AccountingStandardsspecifiedunderSection133oftheAct,readwithRule7oftheCompanies(Accounts)Rules,2014. This responsibility also includesmaintenance of adequate accounting records in accordancewiththeprovisionsoftheActforsafeguardingoftheassetsoftheCompanyandforpreventinganddetectingfraudsandotherirregularities;selectionandapplicationofappropriateaccountingpolicies;makingjudgmentsandestimatesthatarereasonableandprudent;anddesign, implementationandmaintenanceofadequateinternalfinancialcontrols,thatwereoperatingeffectivelyforensuringtheaccuracyandcompletenessoftheaccountingrecords,relevanttothepreparationandpresentationof thefinancial statements thatgivea trueand fairviewandare free frommaterialmisstatement,whetherduetofraudorerror.
AUDITOR’S RESPONSIBILITY
3. Our responsibility is to express an opinion on these financial statements based on our audit. We have taken into account the provisions of the Act, the accounting and auditing standards andmatters which are required to be included in the audit report under the provisions of the Act and the Rules made thereunder.We conducted our audit in accordance with the Standards on Auditing specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.
Anauditinvolvesperformingprocedurestoobtainauditevidenceabouttheamountsanddisclosuresinthefinancialstatements.Theproceduresselecteddependontheauditor’sjudgment,includingtheassessmentof therisksofmaterialmisstatementof thefinancialstatements,whetherdueto fraudorerror.Inmakingthoseriskassessments,theauditorconsidersinternalfinancialcontrolrelevanttotheCompany’spreparationofthefinancialstatementsthatgiveatrueandfairviewinordertodesignauditproceduresthatareappropriateinthecircumstances,butnotforthepurposeofexpressinganopinionwhethertheCompanyhasinplaceanadequateinternalfinancialcontrolssystemoverfinancialreportingandtheoperatingeffectivenessofsuchcontrols.
Anauditalsoincludesevaluatingtheappropriatenessofaccountingpoliciesusedandthereasonablenessof the accounting estimates made by the Company’s Directors, as well as evaluating the overallpresentationofthefinancialstatements.
4. Webelievethattheauditevidencewehaveobtainedissufficientandappropriatetoprovideabasisforour audit opinion onthefinancialstatements.
STCI PRIMARY DEALER LIMITED
215
OPINION
5. In our opinionandtothebestofourinformationandaccordingtotheexplanationsgiventous,theaforesaidfinancialstatementsgivetheinformationrequiredbytheActinthemannersorequiredandgiveatrueandfairviewinconformitywiththeaccountingprinciplesgenerallyacceptedinIndia:
a) ofthestateofaffairsoftheCompanyasatMarch31,2015;
b) oftheprofitfortheyearendedonthatdate;and
c) ofthecashflowsfortheyearendedonthatdate.
REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS
6. As required by the Companies (Auditor’s Report) Order, 2015 (“the Order”) issued by the CentralGovernmentof India intermsofsub-section(11)ofsection143oftheCompaniesAct,2013andinsupersessionoftheCompanies(Auditor’sReport)Order,2003wegiveintheAnnexureastatementonthemattersspecifiedinparagraphs3and4oftheOrder.
7. AsrequiredbySection143(3)oftheAct,wereportthat:
(a) We have sought and obtained all the information and explanationswhich to the best of ourknowledgeandbeliefwerenecessaryforthepurposesofouraudit;
(b) Inouropinion,properbooksofaccountasrequiredbylawhavebeenkeptbytheCompanysofarasitappearsfromourexaminationofthosebooks;
(c) TheBalanceSheet,theStatementofProfitandLoss,andtheCashFlowStatementdealtwithbythisReportareinagreementwiththebooksofaccount;
(d) Inouropinion,theaforesaidfinancialstatementscomplywiththeAccountingStandardsspecifiedunderSection133oftheAct,readwithRule7oftheCompanies(Accounts)Rules,2014;
(e) Onthebasisofthewrittenrepresentationsreceivedfromthedirectorsason31st March,2015takenonrecordbytheBoardofDirectors,noneofthedirectorsisdisqualifiedason31stMarch,2015frombeingappointedasadirectorintermsofSection164(2)oftheAct;
(f) WithrespecttotheothermatterstobeincludedintheAuditor’sReportinaccordancewithRule11of theCompanies (Audit andAuditors) Rules, 2014, inouropinion and to thebestof ourinformationandaccordingtotheexplanationsgiventous:
i. TheCompanydoesnothaveanypendinglitigationswhichwouldimpactitsfinancialposition.
ii. TheCompanyhasmadeprovision,asrequiredundertheapplicablelaworaccountingstandards,formaterialforeseeablelosses,onlong-termcontractsincludingderivativecontracts.
iii. NoamountswererequiredtobetransferredtotheInvestorEducationandProtectionFundbytheCompany.
Forandonbehalfof Chandabhoy & Jassoobhoy
Chartered Accountants FirmRegistrationNo.–101647W
Samir M. Chinoy Partner
Mumbai:April21,2015MembershipNo.:F-40853
INDEPENDENT AUDITORS’ REPORT
STCI PRIMARY DEALER LIMITED
216
ANNEXURE TO THE AUDITORS’ REPORT
ANNEXURE REFERRED TO IN PARAGRAPH 1 OF OUR REPORT OF EVEN DATE TO THE MEMBERS OF STCI PRIMARY DEALER LIMITED ON THE ACCOUNTS FOR THE YEAR ENDED MARCH 31, 2015.
i. a. TheCompanyhasmaintainedproperrecordsshowingfullparticularsincludingquantitativedetailsandsituationoffixedassets.
b. Weareinformedthatfixedassetshavebeenphysicallyverifiedbythemanagementasattheyearendandnomaterialdiscrepancieshavebeennoticedinrespectofassetssoverifiedduringtheyear.InouropinionthefrequencyofverificationisreasonablehavingregardtothesizeoftheCompanyandthenatureofitsassets.
ii. a. Securitiesheldasstockintradeareindematerializedformwithcustodian.Statementofsecuritiesisreceivedfromthemonregularbasis.
b. As securitiesareheld indematerialized form, the requirementofphysical verificationdoesn’tarise.
c. Asinformedtous,thestatementsofsecuritiesobtainedfromcustodiansareverifiedwithbookrecordsandnodiscrepancieswerenoticedduringtheyearunderaudit.
iii. TheCompanyhasnotgrantedanyloansecuredorunsecuredtoanycompanies,firmsorotherpartieslisted in the register maintained under section 189 of the Companies Act, 2013and consequentlyprovisionofclause3(iii)(a)and3(iii)(b)oftheorderarenotapplicabletothecompany.
iv. Inouropinionandaccordingtoinformationandexplanationsgiventous,thereareadequateinternalcontrolprocedurescommensuratewiththesizeoftheCompanyandnatureofitsbusinesswithregardstopurchaseandsaleofsecuritiesandfixedassets.Duringthecourseofouraudit,nomajorweaknesswasnoticedintheinternalcontrols.
v. TheCompanyhasnotacceptedanypublicdepositsduringtheyearfromthepublicwithinthemeaningoftheprovisionsofSection73to76oftheCompaniesAct,2013andrulesmadethereunder.
vi. Accordingtotheinformationandexplanationsgiventous,theCentralGovernmenthasnotprescribedmaintenanceofcostrecordsunderSection148(1)oftheCompaniesAct,2013.
vii. a. According to the information and explanations given to us and the records of the Companyexaminedbyusexcept stampdutyon transactionofNonGovernment securities,(ReferNote19B-Clause21)theCompanyisregularindepositingwiththeappropriateauthorities,undisputedstatutoryduesincludingprovidentfund,incometax,servicetaxandotherstatutoryduesapplicableto it.However, stampduty onNon-Government securities aggregating toRs. 25,540,512/- isoutstandingformorethansixmonthsason31stMarch2015.(ReferNote19B-Clause21).
b. Accordingtotheinformationandexplanationsgiventous,therearenostatutoryduesoutstanding
STCI PRIMARY DEALER LIMITED
217
onaccountofanydisputeasof31stMarch2015
c. According to the information and explanations given to us, no amountswere required to betransferred to the Investor Education and Protection Fund in accordance with the relevantprovisionsoftheCompaniesAct,1956(1of1956)andrulesmadethereunder.
viii. Thecompanyhasnotincurredcashlossesduringthecurrentfinancialyearcoveredbyourauditandtheimmediatelyprecedingfinancialyear.
ix. DuringtheyeartheCompanyhasnotdefaultedinrepaymentofduestoafinancialinstitutionorbank.
x. AccordingtoinformationandexplanationgiventoustheCompanyhasnotgivenanyguaranteeforloanstakenbyassociates.
xi. Inouropinionandaccordingtoinformationandexplanationprovidedtous,thefundsraisedthroughtermloansareappliedforthepurposesforwhichtheyareobtained.
xii. Accordingtotheinformationandexplanationsgiventous,nofraudonorbytheCompanywasnoticedorreportedduringtheyear.
ForandonbehalfofChandabhoy & Jassoobhoy
Chartered AccountantsFirmRegistrationNo.–101647W
Samir M. ChinoyPartner
MembershipNo.:F-40853
Mumbai:April21,2015
ANNEXURE TO THE AUDITORS’ REPORT
STCI PRIMARY DEALER LIMITED
218
AUDITORS’ REPORTTo,TheBoardofDirectors,STCI Primary Dealer Limited,MarathonInnova,MarathonNextgenCompound,Off.GanpatraoKadamMarg,LowerParel(W),Mumbai–400013
WehaveauditedtheBalanceSheetofSTCIPrimaryDealerLimitedasatMarch31,2015andtheProfitandLossAccountfortheyearendedonthatdate.
AsrequiredbyNonBankingFinancialCompaniesAuditor’sReport(ReserveBank)Directions,2008issuedbyReserveBankofIndia(RBI),wegivehereunderourreportonthemattersspecifiedinparagraphs3(A)and(C)ofthesaidDirections:1. a) TheCompanyhasappliedforregistrationundersection451AoftheReserveBankofIndiaAct,
1934andRBIhasgrantedacertificateofregistrationbearingno.13.01865dated23.05.2007. b) ThecompanycontinuedtocarryonbusinessasaNon-BankingFinancialInstitutionduringthe
financialyear2014-15andisentitledtocontinuetoholdsuchCertificateofRegistrationinterms oftheasset/incomeasonMarch31,2015.
2. a) TheBoardofDirectorsoftheCompanyhaspassedaresolutionon21.04.2015fornonacceptance ofanypublicdeposits.
b) TheCompanyhasnotacceptedanypublicdepositsduringtheyearunderreport. c) In our opinion and according to the information and explanations given to us, the Company
hascompliedwiththeprudentialnormsrelatingtoincomerecognition,accountingstandards, assetsclassificationandprovisioningforbadanddoubtfuldebtsasapplicabletoitintermsof NonBankingFinancial(NonDepositAcceptingorHolding)CompaniesPrudentialNorms(Reserve Bank)Directions,2007.
d) i) The Capital adequacy ratio disclosed in the return submitted to Reserve Bank of India on10.04.2014inFormNBS–7forthefinancialyear2013-14,hasbeencorrectlyarrivedand isincompliancewiththeminimumCRARprescribedbyRBI.
ii) TheAnnualStatementofCapitalFunds, riskassets/exposuresandriskasset ratio inForm NBS–7hasbeensubmittedwithinthestipulatedperiod.
ForandonbehalfofChandabhoy & Jassoobhoy
Chartered AccountantsFirmRegistrationNo.–101647W
Samir ChinoyPartner
MembershipNo.:F-40853
May15,2015Mumbai
STCI PRIMARY DEALER LIMITED
219
BALANCE SHEET AS AT MARCH 31, 2015(`inLacs)
Particulars Note No.
As at March 31, 2015
As at March 31, 2014
I. EQUITY AND LIABILITIES1) Shareholders’ funds
(a)ShareCapital 1 15,000.00 16,600.00(b)Reservesandsurplus 2 20,999.51 15,165.04
2) Non-current liabilities(a)Long-termprovisions 3 59.84 35.18
3) Current liabilities(a)Short-termborrowings 4 380,389.02 240,804.34(b)Tradepayables 1.66 2.35(c)Othercurrentliabilities 5 363.19 404.87(d)Short-termprovisions 6 10,622.47 6,138.48
TOTAL 427,435.69 279,150.26 II. ASSETS
1)Non-current assets(a)Fixedassets 7(i)Tangibleassets 1,771.74 1,853.40(ii)Intangibleassets 49.01 8.57(b)Deferredtaxassets(net) 126.40 102.94(c)Long-termloansandadvances 8 39.93 35.22(d)Investments-HTMPortfolio 9 31,380.63 50,801.94
2) Current assets(a)StockinTrade 10 346,052.84 176,844.20(b)Cashandcashequivalents 11 34,035.51 40,027.49(c)Short-termloansandadvances 12 10,019.65 5,447.30(d)Othercurrentassets 13 3,959.98 4,029.20
TOTAL 427,435.69 279,150.26 SignificantAccountingPolicies&NotestoAccounts 19
For and on behalf of the Board of DirectorsIn terms of our report of even date
For Chandabhoy & Jassoobhoy Chartered Accountant Firm Registration No.- 101647W
Samir M Chinoy Partner MembershipNo.:F-40853
Place:Mumbai Date: April21,2015
V R Iyer Chairperson
V Sridar Director
S Ravi Director
Pradeep Madhav ManagingDirector
M. N. Suresh ChiefFinancialOfficer
Kalpesh Mody CompanySecretary
STCI PRIMARY DEALER LIMITED
220
PROFIT AND LOSS STATEMENT FOR THE PERIOD ENDED MARCH 31, 2015(`inLacs)
ParticularsNote No.
For the period ended
March 31, 2015
For the period ended
March 31, 2014I. Revenuefromoperations 14 41,230.50 28,907.77II. Otherincome 15 98.09 1.85III. Total Revenue (I + II) 41,328.59 28,909.62 IV. Expenses:
Employeebenefitsexpense 16 996.53 695.61Finance costs 17 26,648.15 18,702.47Depreciationandamortizationexpense 96.64 144.45Other expenses 18 426.11 391.61Total expenses 28,167.43 19,934.14
V. Profit/ (Loss) before exceptional items and tax (III-IV) 13,161.16 8,975.48 VI. Profit/(Loss) on Sale of Assets 0.31 0.49VII Profit/(Loss) before tax (V+ VI) 13,161.47 8,975.97 VIII Tax expense:
(a)Currenttax 4,633.73 3,196.00(b)Deferredtaxliability/(Asset) (23.47) (48.98)(c)Short/(Excess)provisionfortaxforearlieryears 0.12 26.53(d)TaxonDistributedIncomeonBuybackofShare 482.93 -
IX Prior period expenses 0.64 0.08X Profit/(Loss) after tax (VII-VIII-IX) 8,067.52 5,802.34 XI AppropriationforCorporateSocialResponsibility
Expenditure92.54 -
XII TransfertoStatutoryReserves(CreatedpursuanttoSection45I-CoftheReserveBankofIndiaAct,1934)
1,613.50 1,160.46
XIII TransfertoReserves(ProfitonSaleofHTMSecurities) 1,991.11 -XIV Profit/(Loss) after Appropriation (X-XI-XII-XIII) 4,370.37 4,641.88 XV Earningsperequityshare:
Basic&Diluted 4.88 3.50
For and on behalf of the Board of DirectorsIn terms of our report of even date
For Chandabhoy & Jassoobhoy Chartered Accountant Firm Registration No.- 101647W
Samir M Chinoy Partner MembershipNo.:F-40853
Place:Mumbai Date: April21,2015
V R Iyer Chairperson
V Sridar Director
S Ravi Director
Pradeep Madhav ManagingDirector
M. N. Suresh ChiefFinancialOfficer
Kalpesh Mody CompanySecretary
STCI PRIMARY DEALER LIMITED
221
SCHEDULES FORMING PART OF THE ACCOUNTS
NOTE 1 : SHARE CAPITAL
Particulars As at March 31, 2015 As at March 31, 2014
Number (` in lacs) Number (` in lacs) Authorised
EquitySharesof`10/-each 300,000,000 30,000.00 300,000,000 30,000.00
Issued, Subscribed & Paid up
EquitySharesof`10/-eachfullypaid 150,000,000 15,000.00 166,000,000 16,600.00
Total 150,000,000 15,000.00 166,000,000 16,600.00
NOTE 1.1 : RECONCILLIATION OF THE NUMBER OF SHARES OUTSTANDING
Particulars As at March 31, 2015 As at March 31, 2014
Number (` in lacs) Number (` in lacs)
Sharesoutstandingatthebeginningoftheyear 166,000,000 16,600.00 166,000,000 16,600.00
SharesIssuedduringtheyear - - - -
Sharesboughtbackduringtheyear 16,000,000 1,600.00 - -
Sharesoutstandingattheendoftheyear 150,000,000 15,000.00 166,000,000 16,600.00
NOTE 1.2 : DETAILS OF THE SHAREHOLDING
Name of Shareholder As at March 31, 2015 As at March 31, 2014 No. of Shares
held% of Holding No. of Shares
held% of Holding
STCIFinanceLimited(HoldingCompany)* 150,000,000 100% 166,000,000 100%
*Includes6sharesheldbythenominee
STCI PRIMARY DEALER LIMITED
222
Parti
cula
rs A
s at
M
arch
31,
201
5 A
s at
M
arch
31,
201
4 A
s at
M
arch
31,
201
3 A
s at
M
arch
31,
201
2 A
s at
M
arch
31,
201
1
Equi
ty S
hare
sEq
uity
Sha
res
Equi
ty S
hare
sEq
uity
Sha
res
Equi
ty S
hare
s
Num
ber
(` in
la
cs)
Num
ber
(` in
la
cs)
Num
ber
(` in
la
cs)
Num
ber
(` in
la
cs)
Num
ber
(` in
la
cs)
No.ofS
hares
boug
htback
16,00
0,00
01,600
.00
--
34,000
,000
3,40
0.00
-
--
-
SCH
EDU
LES
FOR
MIN
G P
AR
T O
F TH
E A
CCO
UN
TS
NO
TE 1
.3 :
DET
AIL
S O
F SH
AR
ES B
OU
GH
T B
ACK
DU
RIN
G T
HE
YEA
R
STCI PRIMARY DEALER LIMITED
223
SCHEDULES FORMING PART OF THE ACCOUNTSNOTE 2 : RESERVE & SURPLUS
Particulars As at March 31, 2015 (` in lacs)
As at March 31, 2014 (` in lacs)
a. Statutory Reserves (Reserve created pursuant to Section 45 I-C of Reserve Bank of India Act, 1934)OpeningBalance 3,999.69 2,839.23(+)CurrentYearTransfer 1,613.50 1,160.46(-)WrittenBackinCurrentYear - -ClosingBalance 5,613.19 3,999.69
b. General ReserveOpeningBalance 105.94 105.94(-)WrittenBackinCurrentYear - -ClosingBalance 105.94 105.94
c. Capital Redemption ReserveOpeningbalance 3,400.00 3,400.00(+)TransferfromGeneralReserve/Profit&Lossduringtheyear
1,600.00 -
(-)TransfertoProfit&Lossduringtheyear - -ClosingBalance 5,000.00 3,400.00
d. Reserve on Sale of HTM SecuritiesOpeningbalance 135.52 135.52(+)TransferfromGeneralReserve/Profit&Lossduringtheyear
1,991.11 -
(-)TransfertoProfit&Lossduringtheyear - -ClosingBalance 2,126.63 135.52
e. SurplusOpeningbalance 7,523.89 2,882.01(+)NetProfit/(NetLoss)afterappropriation 4,370.37 4,641.88(-)DepreciationchargedtoRetainedEarning (9.31) -(-)PremiumonBuyback (2,131.20) -(-)TransfertoCapitalRedemptionReserve (1,600.00) -ClosingBalance 8,153.75 7,523.89
Total 20,999.51 15,165.04
*NetProfit(aftertax)fromsaleofsecuritiesthroughHTMportfoliohavebeentransferredtoReserveonSaleofHTMAccountasperRBIGuidelines.ThesamewillbeutilisedaspertheprovisionsoftheapplicableAct.
STCI PRIMARY DEALER LIMITED
224
SCHEDULES FORMING PART OF THE ACCOUNTSNOTE 3 : LONG TERM PROVISIONS
Particulars As at March 31, 2015
(` in lacs)
As at March 31, 2014
(` in lacs) Provisionforemployeebenefits:LeaveEncashment 59.84 35.18Total 59.84 35.18
NOTE 4 : SHORT TERM BORROWINGS
ParticularsAs at
March 31, 2015(` in lacs)
As at March 31, 2014
(` in lacs) Secured a. Other loans and advances
a.1 a.1 Collateral Borrowing and Lending Obligation (CBLO) Segment (SecuredByCollateralofGovt.Securities&TreasuryBills)(oftheabove,̀ NilisguaranteedbyDirectorsand/orothers)
43,755.09 46,644.90
a.2 Borrowing Under Repo(SecuredByCollateralofGovt.Securities&TreasuryBills)(oftheabove,̀ NilisguaranteedbyDirectorsand/orothers)
70,087.09 10,598.82
a.3 Borrowing Under LAF/Refinance from RBI (SecuredByCollateralofGovt.Securities&TreasuryBills)(oftheabove,̀ NilisguaranteedbyDirectorsand/orothers)
182,300.00 83,900.00
a.4 Loan against Fixed Deposit from Bank (SecuredBypledgeoffixeddeposit)(oftheabove,̀ NilisguaranteedbyDirectorsand/orothers)
- 37,750.00
Total (A) 296,142.18 178,893.72
Unsecured
(a) Loans repayable on demand
frombanks(repayableatcall/shortnotice/term) 78,900.00 60,000.00
fromotherparties(Inter-corporateDeposit)(oftheabove,̀ NilisguaranteedbyDirectorsand/orothers)
5,346.84 1,910.62
Total (B) 84,246.84 61,910.62
Total (A+B) 380,389.02 240,804.34
Continuing default as on the balance sheet date in repayment of loans and interest
1.Periodofdefault Nil Nil2.Amount Nil Nil
STCI PRIMARY DEALER LIMITED
225
SCHEDULES FORMING PART OF THE ACCOUNTSNOTE 5 : OTHER CURRENT LIABILITIES
Particulars As at March 31, 2015
(` in lacs)
As at March 31, 2014
(` in lacs)
(a)Interestaccruedbutnotdueonborrowings 324.34 380.34
(b)SundryDeposits&OtherLiabilities 38.85 24.53
Total 363.19 404.87
NOTE 6 : SHORT TERM PROVISIONS
Particulars As at March 31, 2015
(` in lacs)
As at March 31, 2014
(` in lacs)
Others:-
(a)Taxation 9,474.74 4,841.00
(b)FringeBenefitTax - 6.82
(c)CCILCharges 54.59 34.49
(d)StampDuty(ReferNoteNo.19B-21) 273.33 246.22
(e)InterestRateSwap 310.60 614.64
(f)InterestRateFutures 5.34 -
(g)ProvisionforCorporateSocialResposibilityExpenditure - -
(h)LeaveEncashment 20.22 15.11
(i)PerformanceLinkedIncentiveScheme 483.65 380.20
Total 10,622.47 6,138.48
STCI PRIMARY DEALER LIMITED
226
NO
TE 7
: S
CHED
ULE
OF
FIX
ED A
SSET
S
SCH
EDU
LES
FOR
MIN
G P
AR
T O
F TH
E A
CCO
UN
TS(`in
Lacs)
Fixe
d A
sset
sG
ross
Blo
ckA
ccum
ulat
ed D
epre
ciati
onN
et B
lock
Bala
nce
as a
t A
pril
1,
2014
Add
ition
sD
ispo
sals
Bala
nce
as
at M
arch
31,
20
15
Bala
nce
as a
t A
pril
1, 2
014
Dep
reci
ation
ch
arge
for
the
peri
od
Char
ged
to
Reta
ined
Ea
rnin
gs
On
disp
osal
sBa
lanc
e as
at
Mar
ch
31, 2
015
Bala
nce
as
at M
arch
31,
20
15
Bala
nce
as a
t A
pril
1, 2
014
ATa
ngib
le A
sset
s
(a)B
uildings
2,030
.74
--
2,030
.74
363
.74
29.55
-
-393
.29
1,637
.46
1,667
.00
(b)P
lant&Equ
ipmen
t
(i)Com
puters
153
.26
6.88
2.31
157
.83
95.67
25.98
7.11
2.31
126
.44
31.39
57.59
(ii)A
ir-Co
ndition
er35.45
0.92
0.45
35.92
15.15
3.51
-0.45
18.21
17.71
20.30
(c)F
urnitureand
Fixtures
(i)ElectricalInstallatio
n33.84
-
-33.84
12.93
3.26
--
16.18
17.65
20.91
(ii)F
urnitureand
Fixtures
104
.66
--
104
.66
41.27
10.14
-
-51.41
53.25
63.39
(d)V
ehicles-M
otorCar
15.46
-
-15.46
5.93
1.93
--
7.86
7.59
9.52
(e)O
fficeequ
ipmen
t24.18
1.64
-
25.83
9.50
7.44
2.20
-19.14
6.69
14.68
Tot
al (A
) 2
,397
.59
9.4
4 2
.76
2,4
04.2
8 5
44.1
9 8
1.81
9
.31
2.7
6 6
32.5
5 1
,771
.74
1,8
53.4
0
BIn
tang
ible
Ass
ets
Compu
tersoftware
146
.56
55.26
-
201
.82
137
.99
14.83
-
-152
.81
49.01
8.57
Tot
al (B
) 1
46.5
6 5
5.26
-
201
.82
137
.99
14.
83
- -
152
.81
49.
01
8.5
7
Tot
al (A
+B)
2,5
44.1
5 6
4.70
2
.76
2,6
06.0
9 6
82.1
8 9
6.64
9
.31
2.7
6 7
85.3
6 1
,820
.74
1,8
61.9
7
Pre
viou
s Ye
ar
2,512
.31
31.84
-
2,544
.15
537
.73
144
.45
--
682
.18
1,861
.97
-
STCI PRIMARY DEALER LIMITED
227
NOTE 8 : LONG TERM LOANS & ADVANCES
Particulars As at March 31, 2015
(` in lacs)
As at March 31, 2014
(` in lacs)
Unsecured, considered good
SecurityDeposits 39.93 35.22
Total 39.93 35.22
NOTE 9 : INVESTMENTS- HTM PORTFOLIO
Particulars As at March 31, 2015
(` in lacs)
As at March 31, 2014
(` in lacs)
Investments in HTM Portfolio
(a)AggregateamountofquotedInvestmentsinGovernmentsecurities-(CurrentYear-Amortizedcost)
31,380.63 50,801.94
Total 31,380.63 50,801.94
Additional information : -
Aggregateamountofquotedinvestments(FaceValue) 31,500.00 47,875.60
Aggregateamountofquotedinvestments(MarketValue) 33,340.56 47,651.76
Aggregateprovisionfordiminutioninvalueofinvestment Nil Nil
BasisforValuation(ReferNoteno.19A-6) At Cost At Cost
Details of quoted Investment in HTM Portfolio (At Cost)
Investments in Government securities
8.20%GovernmentSecurities2025(3,000,000Unitsof̀ 100/-each) - 3,202.50
8.12%GovernmentSecurities2020(375,600Unitsof`100/-each) - 392.69
8.97%GovernmentSecurities2030(19,500,000Unitsof̀ 100/-each) - 21,592.35
9.20%GovernmentSecurities2030(25,000,000Unitsof̀ 100/-each) - 25,740.00
8.60%GovernmentSecurities2028(17,500,000Unitsof̀ 100/-each) 17,361.05 -
8.17%GovernmentSecurities2044(14,000,000Unitsof̀ 100/-each) 14,019.80 -
Total 31,380.85 50,927.54
SCHEDULES FORMING PART OF THE ACCOUNTS
STCI PRIMARY DEALER LIMITED
228
NOTE 10 : STOCK IN TRADE
ParticularsAs at
March 31, 2015 (` in lacs)
As at March 31, 2014
(` in lacs) (a)InvestmentsinGovernmentsecurities (IncludingTreasuryBills)(ReferAbelow)
308,098.16 139,531.73
(b)InvestmentsinDebenturesorBonds(ReferBbelow) 23,843.89 16,633.43(c)InvestmentsinOtherInstruments(ReferCbelow) 14,110.79 20,679.04Total 346,052.84 176,844.20 (Refer Note no. 19B-9 for Securities kept as collateral with CCIL)
Additional Information:Aggregateamountofquotedinvestments(FaceValue) 328,240.00 157,936.85Aggregateamountofquotedinvestments(Marketvalue) 332,716.35 156,651.08Aggregateamountofunquotedinvestments(FaceValue) 15,000.00 21,500.00Aggregateprovisionfordiminutioninvalueofquotedinvestment(ReferNoteno.19B-2)
- -
Basis of Valuation (Refer Note no. 19A-4) : - InvestmentinGovernmentSecurities(InclusingTreasuryBills) AggregateCost
orMarketValuewhichever is less
AggregateCostorMarketValuewhichever is less
InvestmentinDebenturesorBondsInvestmentinEquityInstrumentsInvestmentinOtherInstruments At Cost At Cost
SCHEDULES FORMING PART OF THE ACCOUNTS
STCI PRIMARY DEALER LIMITED
229
AIn
vest
men
ts in
Gov
ernm
ent s
ecur
ities
(Inc
ludi
ng
Trea
sury
Bill
s)N
o. o
f Sha
res/
Uni
tsQ
uote
d /
Unq
uote
dM
arch
31,
201
5M
arch
31,
201
4Cr
edit
Ra
ting
/
Rati
ng
Age
ncy
(I
f any
) @
Cost
Mar
ket
Valu
eCo
stM
arke
t Va
lue
31.0
3.20
1531
.03.
2014
(` in
lacs
) (`
in la
cs)
(` in
lacs
) (`
in la
cs)
(1) T
reas
ury
Bills
(FV
` 1
00/-
eac
h)(1.1)9
1da
ysTreasuryBillsm
aturingon
8-May-201
4-
5,000
,000
Quo
ted
--
4,954
.84
4,957
.63
-30
-May-201
4-
2,500
,000
Quo
ted
--
2,464
.39
2,466
.36
-5-Jun-20
14-
2,500
,000
Quo
ted
--
2,460
.83
2,462
.92
-26
-Jun
-201
4-
100
,000
Quo
ted
--
97.97
98.03
-
9-Apr-201
550
0-
Quo
ted
0.50
0.50
--
-30
-Apr-201
515
,000
,000
-Quo
ted
14,90
2.14
14,92
2.90
-
--
14-M
ay-201
52,50
0,00
0-
Quo
ted
2,471
.92
2,479
.59
--
-22
-May-201
530
,402
,750
-Quo
ted
30,05
3.85
30,10
2.48
-
--
11-Jun
-201
55,00
0,00
0-
Quo
ted
4,921
.28
4,929
.31
--
-25
-Jun
-201
559
,719
,250
-Quo
ted
58,59
2.65
58,69
8.12
-
--
(1.2)1
82daysTrea
suryBillsmaturingon
5-Jun-20
14-
3,500
,000
Quo
ted
--
3,445
.16
--
27-Apr-201
52,50
4,00
0-
Quo
ted
2,489
.31
2,492
.76
--
-8-May-201
58,40
0,00
0-
Quo
ted
8,330
.19
8,342
.21
--
-21
-May-201
53,75
0-
Quo
ted
3.71
3.71
--
-2-Jul-2
015
18,500
,000
-Quo
ted
18,12
4.08
18,15
6.37
-
--
(1.3)3
64daysTrea
suryBillsmaturingon
1-May-201
4-
32,42
1,50
0Quo
ted
--
32,21
2.58
32,21
2.58
-
30-Oct-201
4-
34,25
0,00
0Quo
ted
--
32,69
0.59
32,69
0.59
-
1-May-201
52,50
0,00
0-
Quo
ted
2,483
.46
2,486
.61
--
-28
-May-201
51,00
0,00
0-
Quo
ted
987
.39
988
.84
--
-11
-Jun
-201
55,00
0,00
0-
Quo
ted
4,920
.99
4,929
.31
--
-9-Jul-2
015
23,000
,000
-Quo
ted
22,49
8.88
22,53
9.40
-
--
(2) G
over
nmen
t Dat
ed S
ecur
ities
(FV
` 1
00/-
eac
h)(2.1)G
overnm
ento
fInd
iasecurities
8.24
%GS20
27-
86,500
Quo
ted
--
80.65
80.65
-
8.28
%GS20
27-
6,00
0Quo
ted
--
5.60
5.60
-9.15
%GS20
24-
1,00
0,00
0Quo
ted
--
1,002
.81
1,006
.43
-8.35
%GS20
2250
0,00
0-
Quo
ted
513
.10
514
.01
--
-9.23
%GS20
4350
0,00
0-
Quo
ted
573
.95
576
.75
--
-8.60
%GS20
2850
0,00
0-
Quo
ted
534
.02
534
.79
--
-8.40
%GS20
2451
,500
,000
-Quo
ted
53,62
2.28
53,72
4.80
-
--
SCH
EDU
LES
FOR
MIN
G P
AR
T O
F TH
E A
CCO
UN
TSN
OTE
10
: S
TOCK
IN T
RA
DE
STCI PRIMARY DEALER LIMITED
230
AIn
vest
men
ts in
Gov
ernm
ent
secu
riti
es
(Inc
ludi
ng T
reas
ury
Bills
)N
o. o
f Sha
res/
Uni
tsQ
uote
d /
Unq
uote
dM
arch
31,
201
5M
arch
31,
201
4Cr
edit
Rati
ng /
Ra
ting
Age
ncy
(I
f any
)@Co
stM
arke
t Val
ueCo
stM
arke
t Val
ue
31.0
3.20
1531
.03.
2014
(` in
lacs
) (`
in la
cs)
(` in
lacs
) (`
in la
cs)
(2.2)S
tateDevelop
men
tloa
ns
8.75
%Him
acha
lPrade
shSDL20
17-
1,50
0,00
0Quo
ted
--
1,512
.30
1,512
.30
-
8.74
%Karna
takaSDL20
16-
6,50
0,00
0Quo
ted
--
6,603
.65
6,603
.65
-
8.77
%Karna
takaSDL20
16-
17,000
,000
Quo
ted
--
17,01
0.58
17,01
0.58
-
8.43
%GujaratSDL20
18-
1,00
0,00
0Quo
ted
--
1,022
.33
1,022
.33
-
9.35
%W
estB
engalSDL20
23-
656,00
0Quo
ted
--
658
.78
667
.88
-
9.40
%And
hraPrad
eshSD
L20
24-
4,78
0,00
0Quo
ted
--
4,782
.99
4,880
.86
-
9.37
%GujaratSDL20
24-
9,77
7,00
0Quo
ted
--
9,783
.41
9,964
.49
-
9.69
%Jh
arkh
andSD
L20
24-
3,00
0,00
0Quo
ted
--
3,053
.60
3,119
.09
-
9.41
%Karna
takaSDL20
24-
7,36
0,00
0Quo
ted
--
7,373
.11
7,520
.02
-
9.41
%KeralaSD
L20
24-
4,79
8,00
0Quo
ted
--
4,805
.68
4,902
.32
-
9.40
%M
adhyaPrad
eshSD
L20
24-
3,13
2,30
0Quo
ted
--
3,134
.57
3,198
.39
-
9.42
%W
estB
engalSDL20
24-
360,00
0Quo
ted
--
360
.25
368
.06
-
9.67
%Jh
arkh
andSD
L20
24-
15,000
Quo
ted
--
15.10
15.57
-
8.35
%Rajasthan
SDL20
2050
0,00
0-
Quo
ted
504
.80
506
.32
--
-
9.23
%GUJARA
TSD
L20
222,00
0,00
0-
Quo
ted
2,115
.10
2,119
.89
--
-
8.86
%Pun
jabSD
L20
2250
0,00
0-
Quo
ted
521
.00
521
.83
--
-
8.68
%GujaratSDL20
231,00
0,00
0-
Quo
ted
1,031
.40
1,034
.63
--
-
8.65
%Karna
takaSDL20
233,00
0,00
0-
Quo
ted
3,089
.03
3,099
.77
--
-
9.50
%GujaratSDL20
2350
0,00
0-
Quo
ted
538
.90
543
.22
--
-
9.79
%M
aharashtraSDL20
232,50
0,00
0-
Quo
ted
2,763
.44
2,760
.97
--
-
9.40
%Rajasthan
SDL20
234,90
0,00
0-
Quo
ted
5,287
.15
5,304
.24
--
-
9.39
%BiharSDL20
232,00
0,00
0-
Quo
ted
2,151
.95
2,161
.16
--
-
9.49
%KeralaSD
L20
2350
0,00
0-
Quo
ted
539
.37
542
.37
--
-
9.33
%UttarPrade
shSDL20
232,00
0,00
0-
Quo
ted
2,144
.65
2,153
.87
--
-
9.39
%Tam
ilNad
uSD
L20
232,50
0,00
0-
Quo
ted
2,699
.31
2,704
.71
--
-
9.39
%Karna
takaSDL20
23Dec
2,50
0,00
0-
Quo
ted
2,692
.19
2,705
.88
--
-
9.41
%Tam
ilNad
uSD
L20
242,50
0,00
0-
Quo
ted
2,696
.19
2,711
.33
--
-
9.26
%And
hraPrad
eshSD
L20
242,50
0,00
0-
Quo
ted
2,673
.81
2,689
.42
--
-
9.51
%Haryana
SDL20
246,00
0,00
0-
Quo
ted
6,513
.00
6,553
.88
--
-
9.41
%Karna
takaSDL20
242,00
3,00
0-
Quo
ted
2,162
.84
2,174
.47
--
-
9.41
%KeralaSD
L20
2450
0,00
0-
Quo
ted
538
.41
542
.80
--
-
SCH
EDU
LES
FOR
MIN
G P
AR
T O
F TH
E A
CCO
UN
TSN
OTE
10
: S
TOCK
IN T
RA
DE
STCI PRIMARY DEALER LIMITED
231
SCH
EDU
LES
FOR
MIN
G P
AR
T O
F TH
E A
CCO
UN
TS
AIn
vest
men
ts in
Gov
ernm
ent s
ecur
ities
(I
nclu
ding
Tre
asur
y Bi
lls)
No.
of S
hare
s/U
nits
Quo
ted
/ U
nquo
ted
Mar
ch 3
1, 2
015
Mar
ch 3
1, 2
014
Cred
it R
ating
/
Rati
ng A
genc
y
(If a
ny)@
Cost
Mar
ket V
alue
Cost
Mar
ket V
alue
31.0
3.20
1531
.03.
2014
(` in
lacs
) (`
in la
cs)
(` in
lacs
) (`
in la
cs)
9.53
%GujaratSDL20
2450
0,00
0-
Quo
ted
546
.15
546
.78
--
-
9.75
%KeralaSD
L20
242,00
0,00
0-
Quo
ted
2,201
.65
2,215
.85
--
-
8.99
%M
adhyaPrad
eshSD
L20
244,00
0,00
0-
Quo
ted
4,215
.17
4,256
.40
--
-
8.97
%Karna
takaSDL20
241,00
0,00
0-
Quo
ted
1,057
.30
1,062
.94
--
-
8.88
%And
hraPrad
eshSD
L20
241,00
0,00
0-
Quo
ted
1,051
.40
1,057
.76
--
-
8.45
%BiharSDL20
245,00
0,00
0-
Quo
ted
5,102
.00
5,145
.08
--
-
9.40
%UttarPrade
shSDL20
232,50
0,00
0-
Quo
ted
2,703
.78
2,705
.09
--
-
9.35
%KeralaSD
L20
233,50
0,00
0-
Quo
ted
3,763
.20
3,779
.63
--
-
8.12
%Telan
gana
SDL20
2584
,000
-Quo
ted
84.00
84.44
-
--
8.04
%Haryana
SDL20
254,62
5,40
0-
Quo
ted
4,626
.95
4,623
.53
--
-
8.05
%Jh
arkh
andSD
L20
254,00
0,00
0-
Quo
ted
4,001
.53
4,001
.09
--
-
8.03
%OdishaSD
L20
2522
0,00
0-
Quo
ted
220
.00
219
.76
--
-
8.05
%SikkimSDL20
256,29
0,00
0-
Quo
ted
6,292
.71
6,337
.18
--
-
8.05
%UttarPrade
shSDL20
251,50
0,00
0-
Quo
ted
1,500
.68
1,500
.41
--
-
8.05
%Uttarakha
ndSDL20
253,47
2,80
0-
Quo
ted
3,474
.16
3,473
.75
--
-
(2.3)G
overnm
entS
pecialSecurities
10.03%
RJS
DLSPL20
2850
0,00
0-
Quo
ted
571
.25
570
.53
--
-
Tota
l (A
) 3
08,0
98.1
6 3
08,8
33.4
3 1
39,5
31.7
3 1
40,2
14.4
1
NO
TE 1
0 :
STO
CK IN
TR
AD
E
STCI PRIMARY DEALER LIMITED
232
BIn
vest
men
ts in
Deb
entu
res
or B
onds
No.
of S
hare
s/U
nits
Quo
ted
/ U
nquo
ted
Mar
ch 3
1, 2
015
Mar
ch 3
1, 2
014
Cred
it R
ating
/
Rati
ng A
genc
y
(If a
ny)@
Cost
Mar
ket V
alue
Cost
Mar
ket
Valu
e31
.03.
2015
31.0
3.20
14 (`
in la
cs)
(` in
lacs
) (`
in la
cs)
(` in
lacs
)
Deb
entu
res
or B
onds
(FV
`10
Lac
eac
h)11
.60%
Shrira
mTranspo
rt201
6P/C20
15-
194,55
0Quo
ted
--
193
.71
198
.52
AA+CA
RE
8.40
%HDFC
201
4-
2,50
0,00
0Quo
ted
--
2,483
.52
2,483
.52
AAACRISIL
10.15%
L&TFina
nce20
14-
2,50
0,00
0Quo
ted
--
2,494
.45
2,500
.54
AA+ICRA
9.57
%BajajFinan
ce201
4-
2,50
0,00
0Quo
ted
--
2,489
.77
2,495
.38
AA+CR
ISIL
8.91
%L&TInfraFina
nce20
14-
2,50
0,00
0Quo
ted
--
2,485
.16
2,498
.86
AA+CA
RE
8.76
%NHBTaxFree
203
4-
1,50
0,00
0Quo
ted
--
1,500
.00
1,531
.88
AA
A C
ARE
9.48
%M
ahindraFina
nce20
14-
2,50
0,00
0Quo
ted
--
2,489
.57
2,494
.18
AA+CR
ISIL
8.93
%(8
.68%
)NHBTaxFree
202
9-
2,50
0,00
0Quo
ted
--
2,497
.25
2,497
.25
AA
A C
ARE
11.60%
Shrira
mTranspo
rt201
6P/C20
151,69
4,55
0-
Quo
ted
1,705
.79
1,703
.47
--
AA+CA
RE
11.35%
Shrira
mTranspo
rt201
6P/C20
1550
0,00
0-
Quo
ted
502
.86
502
.23
--
AA+CA
RE
8.76
%NHBTaxFree
203
41,00
0,00
0-
Quo
ted
1,153
.50
1,155
.52
--
AA
A C
ARE
7.45
%BoB
201
531
0,00
0-
Quo
ted
305
.06
309
.82
--
AAACRISIL
8.81
%HDB20
152,50
0,00
0-
Quo
ted
2,496
.98
2,497
.58
--
AA
A C
ARE
11.25SR
EIIN
FRA201
92,50
0,00
0-
Quo
ted
2,472
.00
2,501
.17
--
AA
Bri
ckw
orks
8.94
%Can
FinHom
es202
41,56
0,00
0-
Quo
ted
1,569
.45
1,576
.98
--
AA
A C
ARE
7.18
%IR
FC202
31,50
0,00
0-
Quo
ted
1,501
.80
1,501
.79
--
AAACRISIL
8.65
%PFC
202
42,00
0,00
0-
Quo
ted
2,038
.26
2,045
.81
--
AA
A IC
RA
8.65
%L&TInfraFina
nce20
202,50
0,00
0-
Quo
ted
2,500
.00
2,475
.08
--
AA+CA
RE
8.65
%PFC
201
955
0,00
0-
Quo
ted
555
.84
557
.01
--
AA
A IC
RA
8.23
%REC
202
52,00
0,00
0-
Quo
ted
1,988
.46
1,996
.21
--
AAACRISIL
8.57
%REC
202
41,50
0,00
0-
Quo
ted
1,524
.40
1,528
.24
--
AAACRISIL
10.60%
ECLFinan
ce202
01,00
0,00
0-
Quo
ted
992
.60
996
.84
--
AA
CA
RE
8.50
%EXIM202
32,50
0,00
0-
Quo
ted
2,536
.88
2,535
.18
--
AAACRISIL
Tota
l (B)
23,
843.
89
23,
882.
92
16,
633.
43
16,
700.
11
SCH
EDU
LES
FOR
MIN
G P
AR
T O
F TH
E A
CCO
UN
TSN
OTE
10
: S
TOCK
IN T
RA
DE
STCI PRIMARY DEALER LIMITED
233
CIn
vest
men
t in
Oth
er In
stru
men
tN
o. o
f Sha
res/
Uni
tsQ
uote
d /
Unq
uote
dM
arch
31,
201
5M
arch
31,
201
4Cr
edit
Rati
ng /
Ra
ting
Age
ncy
(I
f any
)@Co
stM
arke
t Val
ueCo
stM
arke
t Va
lue
31.0
3.20
1531
.03.
2014
(` in
lacs
) (`
in la
cs)
(` in
lacs
) (`
in la
cs)
(1)C
ertifi
cateofD
eposit(FV
`1lacea
ch)
CDIn
dian
Ban
k02
.05.20
14-
5,00
0Unq
uoted
--
4,954
.82
4,954
.82
A1+
India
Ratin
gs&
Rese
arch
CDCANARA
BANK19
.01.20
15-
5,00
0Unq
uoted
--
4,657
.83
4,657
.83
A1+
CRISIL
CDVijayaBan
k02.03
.201
5-
1,50
0Unq
uoted
--
1,377
.15
1,377
.15
A1+
CARE
CDAnd
hraBa
nk01.03
.201
65,00
0-
Unq
uoted
4,636
.68
4,636
.68
--
A1+
CARE
CDPun
jab&SindBa
nk15.06
.201
52,50
0-
Unq
uoted
2,456
.02
2,456
.02
--
A1+
ICRA
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STCI PRIMARY DEALER LIMITED
234
NOTE 11 : CASH AND CASH EQUIVALENTS
Particulars As at March 31, 2015 As at March 31, 2014 (` in lacs) (` in lacs) (` in lacs) (` in lacs)
(a)Balanceswithbanks 35.35 27.46Thisincludes: In Current Account with RBI 22.42 23.48 In Current Account with Others 12.93 3.98(b)Cashonhand 0.16 0.03(c)BankDepositwithmaturitylessthan12months 34,000.00 40,000.00Total 34,035.51 40,027.49
NOTE 12 : SHORT TERM LOANS AND ADVANCES
Particulars As at March 31, 2015 (` in lacs)
As at March 31, 2014 (` in lacs)
Unsecured, considered goodLoans and advances (Others)(a)MarginMoneywithCCIL (Securities&CBLOsegment)
308.00 488.00
(b)MarginMoneywithNSE(IRFTrading) 22.00 200.00(c)AdvancePaymentofDirectTaxes (AdvanceTax+SelfAssessmentTax+TDSonInterest)
9,670.97 4,736.37
(d)AdvancePaymentofFBT - 6.94(e)Advancepaidtosuppliers 1.84 1.22(f)AdvancepaidforFixedAssets 16.84 14.77(g)Advancepaidtostaff - - Total 10,019.65 5,447.30
SCHEDULES FORMING PART OF THE ACCOUNTS
STCI PRIMARY DEALER LIMITED
235
NOTE 13 : OTHER CURRENT ASSETS
Other Current Asset As at March 31, 2015 As at March 31, 2014 (` in lacs) (` in lacs) (` in lacs) (` in lacs)
(a) AccruedIncome 3,914.00 3,995.11whichincludes:-
OnGovernmentSecurities(Trading) 799.72 35.75OnStateDevelopmentLoan(SDL's) 1,351.40 1,229.35OnGOISpecialSecurities 22.71 - On Corporate Bond 771.19 753.57OnGovernmentSecurities(Investment) 878.75 1,734.19 On Fixed Deposit 87.65 236.85 On Others 2.58 5.40
(b) Prepaid expenses 45.78 33.90
(c) OtherReceivables 0.20 0.19
Total 3,959.98 4,029.20
SCHEDULES FORMING PART OF THE ACCOUNTS
STCI PRIMARY DEALER LIMITED
236
NOTE 14 : REVENUE FROM OPERATIONS
Particulars For the period ended March 31, 2015
For the period ended March 31, 2014
(` in lacs) (` in lacs) (` in lacs) (` in lacs) (a) Trading Profit/(Loss) on securities (Refer A below)
11,816.36 6,898.18
GovernmentSecurities 9,947.64 5,712.39
StateDevelopmentLoans 470.02 1,392.80
GOISpecialSecurities 46.99 2.45
Corporate Bonds 651.08 (733.14)
Zero Coupan Bonds 111.17 -
LiquidMutualFund 160.28 309.49
Interest Rate Swaps 284.15 207.74
Interest Rate Futures 145.03 6.45
(b) Interest Income on Discounted Instrument (Refer B below)
11,148.59 6,567.66
TreasuryBills 10,643.09 5,665.06
CommercialPapers 411.13 673.13
CertificateofDeposits 82.00 218.87
CBLOLending 12.37 10.60
(c) Interest Income 17,868.78 13,790.58
Intereston-
CallMoney 0.67 -
GovernmentSecurities(Trading) 5,942.96 1,572.32
GovernmentSecurities(Investment) 3,552.70 3,298.45
StateDevelopmentLoan 2,762.51 4,693.04
GOISpecialSecurities 21.62 0.29
Corporate Bond 1,623.78 1,410.93
Fixed Deposit 3,982.41 2,871.78
IncomefromRepo 181.18 265.99
Other Interest 38.30 26.81
Interest Rate Swaps (237.35) (349.03)
(d) Underwritting & Other Income 396.77 1,651.35
UnderwritingFees 395.99 1,648.35
OtherFeeIncome 0.40 -
IncentiveIncome 0.38 3.00
Total 41,230.50 28,907.77
SCHEDULES FORMING PART OF THE ACCOUNTS
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237
A Trading Profit/(Loss) on securities For the period ended March 31, 2015
For the period ended March 31, 2014
(` in lacs) (` in lacs) (` in lacs) (` in lacs)
(a) Government securities 9,947.64 5,712.39Sales(netofbrokerage) 40,072,044.87 29,896,299.43Add:Stockonhandasattheendoftheyear 55,243.35 1,089.06Less:(i)Purchases (40,116,251.52) (29,855,114.74)(ii)Stockonhandasatthebeginningof theyear
(1,089.06) (36,561.36)
(b) State Development Loans 470.02 1,392.80Sales(netofbrokerage) 843,571.38 894,087.03Add:Stockonhandasattheendoftheyear 81,503.20 60,116.33Less:(i)Purchases (864,488.23) (889,738.37)(ii)Stockonhandasatthebeginningof theyear
(60,116.33) (63,072.19)
(c) GOI Special Securities 46.99 2.45Sales(netofbrokerage) 32,876.43 3,800.20Add:Stockonhandasattheendoftheyear 571.25 -Less:(i)Purchases (33,400.69) (3,797.75)(ii)Stockonhandasatthebeginningof theyear
- -
(d) Corporate Bond 651.08 (733.14)Sales(netofbrokerage) 169,519.70 63,964.22Add:Stockonhandasattheendoftheyear 23,843.89 16,633.43Less:(i)Purchases (176,079.08) (75,260.26)(ii)Stockonhandasatthebeginningof theyear
(16,633.43) (6,070.53)
(e) Zero Coupon Bonds 111.17 -Sales(netofbrokerage) 3,668.81 -Add:Stockonhandasattheendoftheyear - -Less:(i)Purchases (3,557.64) -(ii)Stockonhandasatthebeginningof theyear
- -
(f) Liquid Mutual Fund 160.28 309.49Sales(netofbrokerage) 454,960.28 793,409.49Add:Stockonhandasattheendoftheyear - -Less:(i)Purchases (454,800.00) (793,100.00)(ii)Stockonhandasatthebeginningof theyear
- -
(g) Interest Rate Swap 284.15 207.74Profit&LossincludingMTMonIRS 284.15 207.74
(h) Interest Rate Futures 145.03 6.45Profit&LossincludingMTMonIRF 145.03 6.45Total (A) 11,816.36 6,898.18
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B Discount Income For the period ended March 31, 2015
For the period ended March 31, 2014
(` in lacs) (` in lacs) (` in lacs) (` in lacs) (a) Treasury Bills 10,643.09 5,665.06
Sales(netofbrokerage) 2,642,949.48 2,364,734.75Add:Stockonhandasattheendoftheyear 170,780.36 78,326.35
Less:(i)Purchases (2,724,760.40) (2,385,906.33)(ii)Stockonhandasatthebeginningof theyear
(78,326.35) (51,489.71)
(b) Commercial Papers 411.13 673.13Sales(netofbrokerage) 17,231.92 32,086.57Add:Stockonhandasattheendoftheyear 4,692.53 9,689.25Less:(i)Purchases (11,824.07) (19,091.16)(ii)Stockonhandasatthebeginningof theyear
(9,689.25) (22,011.53)
(c) Certificate of Deposit 82.00 218.87Sales(netofbrokerage) 11,982.85 12,799.83Add:Stockonhandasattheendoftheyear 9,418.26 10,989.79Less:(i)Purchases (10,329.32) (18,856.29)(ii)Stockonhandasatthebeginningof theyear
(10,989.79) (4,714.46)
(d) CBLO Lending 12.37 10.60Total (B) 11,148.59 6,567.66
NOTE 15 : OTHER INCOME
Particulars For the period ended March 31, 2015
For the period ended March 31, 2014
(` in lacs) (` in lacs) (a)Previousyear'sprovisionwrittenBack 98.04 0.74
(b)Misc.Receipt 0.05 1.11
Total 98.09 1.85
SCHEDULES FORMING PART OF THE ACCOUNTS
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NOTE 16 : EMPLOYEE BENEFIT EXPENSES
Particulars For the period ended March 31, 2015
For the period ended March 31, 2014
(` in lacs) (` in lacs) (a)Salary&Reimbursements 486.64 341.30(b)ContributiontoPF 23.59 18.02(c)Gratuity 5.57 8.28(d)LeaveEncashment 41.95 9.37(e)Staffwelfareexpenses 31.79 18.64(f)Conveyance 3.29 -(g)PerformanceLinkedVariableScheme 403.70 300.00Total 996.53 695.61
NOTE 17 : FINANCE COST
Particulars For the period ended March 31, 2015
For the period ended March 31, 2014
(` in lacs) (` in lacs) (` in lacs) (` in lacs)
(a) Interest expenseIntereston- 20,694.17 14,683.32CallMoney 4,485.10 3,945.22BorrowingfromRBI 2,481.48 2,310.80Inter-CorporateDeposit 443.80 968.39TermMoney 3,014.70 2,568.68LoanagainstFixedDeposit 17.15 109.67RefiancefromRBI 3,063.33 2,238.35RepoBorrowing 7,188.61 2,542.14 Others - 0.07
(b) Interest expense on discounted instrument 4,329.08 2,782.38CBLOBorrowing 4,329.08 2,782.38
(c) Financial Charges 1,526.17 1,097.61BankCharges 0.43 0.47DP/CCIlCharges 1,364.63 1,007.55OverdraftFacilitycharges 124.32 74.01StampDutypayment 28.36 12.94IRFTradingCharges 8.43 2.64
(d) Amortization of Premium on Investment 98.73 139.16
Total 26,648.15 18,702.47
SCHEDULES FORMING PART OF THE ACCOUNTS
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240
NOTE 18 : OTHER EXPENSES
Other Expenses For the period ended March 31, 2015
For the period ended March 31, 2014
(` in lacs) (` in lacs) (` in lacs) (` in lacs)
(a) Administrative Expenses 194.61 159.54ElectricityCharges 19.39 15.98InsuranceCharges 17.45 12.86Postage,Telephone&Telegrams 38.48 33.26Printing&stationeryExpenses 10.89 6.19Rent 30.62 21.39Repairs&Maintanance 44.63 44.24Rates&Taxes 2.00 1.01Softwaremaintanance 10.85 6.23OtherofficeExpenses 20.30 18.38
(b) Professional Fees 70.91 92.16RatingCharges 20.22 20.24Internal Audit 8.58 6.74SoftwareConsultancy 5.62 8.66HumanResourceConsultancy 16.84 16.85Other professional fees 19.65 39.67
(c) Payment to Auditors 11.39 7.24for audit services 5.26 3.37fortaxationmatters 2.06 1.57for other services 3.87 2.17forreimbursementofexpenses 0.20 0.13
(d) Others 149.20 132.67AdvertisingExpenses 2.40 0.29InformationServices 72.72 66.86Newspaper&periodicals 5.05 4.97BusinessDevelopmentExpenses 17.77 21.76Travelling,Conveyance&MotorCarExpenses 30.12 16.54BoardMeetingExpenses 6.32 5.31SittingFeestoDirectors 14.59 12.36MiscellaneousExpenses 0.23 4.58Total 426.11 391.61
SCHEDULES FORMING PART OF THE ACCOUNTS
STCI PRIMARY DEALER LIMITED
241
NOTE 19
SIGNIFICANT ACCOUNTING POLICIES AND NOTES TO ACCOUNTS FOR THE YEAR ENDED MARCH 31, 2015
A] SIGNIFICANT ACCOUNTING POLICIES
TheaccountshavebeenpreparedtocomplyinallmaterialaspectswithapplicableaccountingprinciplesinIndia,theAccountingStandards issuedbytheInstituteofCharteredAccountants of India,therelevantprovisionsofTheCompaniesAct,2013andtheReserveBankof Indiaguidelines toNBFCasapplicabletoPrimaryDealersinGovernmentSecurities.
1. Method of Accounting
TheCompanyfollowsaccrualsystemofaccounting.
2. Revenue Recognition
i. Treasury Bills
ThedifferencebetweentheacquisitioncostandtheredemptionvalueofTreasuryBills,heldasonBalanceSheetdateisapportionedontimebasisandrecognisedasincome.Thesameisincludedinthecarryingamountofthesesecuritiesandtheaggregateamountisregardedascostforthepurposeofvaluationofclosingstock.
ii. Zero Coupon Bonds
The difference between the acquisition cost and redemption value of Zero Coupon Bonds isapportionedontimebasisandrecognisedasincome.Thesameisincludedinthecarryingamountofthesesecuritiesandtheaggregateamountisregardedascostforthepurposeofvaluationofclosingstock.
iii. Government Securities, FI & Other Bonds and Equities
a) Theamountspaidandreceived towardsaccrued intereston thepurchasesandsalesof:(i)GovernmentSecuritiesand(ii) FIandOtherBondsarenettedoffattheyear-endandreckonedasincomeunder“InterestonGovernmentSecurities”and“InterestonFIandOtherBonds” respectively.Accordingly, in respectof the transactions inGovernmentSecuritiesandFI&OtherBondsdealtwithonoutrightbasis,acquisitioncostandsaleproceedsarethecontractedpurchasepriceandsalepricerespectively.Incaseofsecuritiestransferredfromstock-in-trade toHeld toMaturity (HTM)Portfolio, the same is reckonedas saleatmarketvalueorBookValuewhicheverislower.
b) ThecommissionreceivedfromReserveBankof India onthepurchasesofGovernmentSecuritiesandTreasuryBillsmadebytheCompanythroughsubscriptiontothefloatationsintheprimarymarketisdeductedfromthepurchaseconsiderationpaidandthenetamountaftersuchreductionisreckonedascostofthesesecurities.
c) Interestonfixed coupondebt securityheldonbalance sheetdate is accrued forexpiredperiodatcouponrateandinterestonfloatingratesecuritiesisaccruedattheratedeterminedbythetermsofissue.
SCHEDULES FORMING PART OF THE ACCOUNTS
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242
d) In case of Inflation IndexedBonds (IIB), the interest and consideration towards purchaseandsaleof IIBare indexedwith the index ratioprevalenton thedateof the transaction.TheamountspaidandreceivedtowardsaccruedinterestonthepurchasesandsalesofIIBarenettedoffattheyear-endandreckonedasincomeunder“InterestonIIB”.Accordingly,inrespectofthetransactionsinIIB,acquisitioncostandsaleproceedsarethecontractedpurchasepriceandsalepricerespectively.
e) CostofpurchaseofsecuritiesincludesBrokerageandSecuritiesTransactionTax(STT)paidtowards the transaction.At thetimeofsaleofsecurities,brokerageandSTTarereducedfromconsiderationreceived.
iv. Commercial Papers & Certificate of Deposits
ThedifferencebetweentheacquisitioncostandtheredemptionvalueofCommercialPapers(CPs)andCertificateofDeposits(CDs),heldasonBalanceSheetdateisapportionedontimebasisandrecognisedas income.Thesame is included in thecarryingamountof thesesecuritiesandtheaggregateamountisregardedascostforthepurposeofvaluationofclosingstock.
v. CBLO transactions
TransactionsforborrowingandlendingunderCBLOarerecordedattheirdiscountedvalues.ThedifferencepaidorreceivedonredemptionistreatedasdiscountpaidonCBLOincaseofborrowinganddiscountearnedonCBLO incaseof lending.Thedifferencebetween thediscountedvalueontheborrowingdateorthelendingdate,asthecasemaybe,andtheredemptionvalueoftheinstrument,outstandingontheBalanceSheetdateisapportionedonthetimebasisandrecognizedasexpenseorincomerespectivelyundertheheadInterest/discountincomeorexpenses.Thesameisincludedinthecarryingamountoftheborrowingorlending.
vi. Pass Through Certificates
Thedifferencebetweentheacquisitioncost(asreducedbytheproportionateamountofinflows)andtheredemptionvalueisapportionedontimebasis(usingtheIRRatthetimeofacquisition)andrecognisedasaccruedincome.Thisaccruedincomeisaddedtotheacquisitioncost(asreducedbytheproportionateamountofinflows)oftherespectivePassThroughCertificates(PTCs)andthesumisregardedascost(bookvalue)forthepurposeofvaluationofclosingstock.Anyrevenueorincomereceivedonprepaymentsisaddedtotheincome.
vii. Equity and Index Futures and Options
a) TheinitialmarginandtheadditionalmarginpaidforenteringintocontractsforequityandindexfuturesandoptionsaredisclosedunderShortTermLoansandAdvances.
b) “EquityOptionPremiumAccount”representsthepremiumpaidorreceivedforbuyingorsellingtheoptions,respectively.Thenetpremiumpaidorreceivedforbuyingorsellingtheoption,asthecasemaybe,isrecognizedintheProfitandLossAccountforallsquared-up/settledcontracts.Similarly,ontheexpiryofthecontractsandonexercisingtheoptions,thedifferencebetweenthefinalsettlementpriceandthestrikepriceistransferredtotheProfitandLossAccount.
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243
c) Gainsorlossesonstock/indexfuturescontractsarerecognizedonsquaringupofpositionsorexpiryofcontracts.
d) TheOpenpositionsaremarkedtomarketonthebalancesheetdateandgains,ifany,arenotrecognized.TheProvisionforLossonEquityIndex/StockFutures/OptionAccountrepresentsthemarktomarketlossesforopenpositionsonbalancesheetdate.
e) Thedailymark-to-marketmarginpaidto/receivedfromthecustodianinrespectofequityfuturestradesisdebitedorcreditedonDailybasisandthesameisdisclosedunderLoansandAdvancesorCurrentliabilitiesasthecasemaybe.
viii. Expenses / Income under Repo Transactions
In linewiththerevisedguidelines issuedbytheReserveBankof India (RBI), repo/reverserepotransactions are treated as borrowing and lending transactions. Further, in line with the RBIguidelines, the difference between the considerations (clean price and the accrued interest)between the 1st and 2nd leg of the repo and reverse repo transactions is accounted as RepoExpenditureorRepoIncome,asthecasemaybe,overtheperiodofthecontract.
ix. Underwriting Fees
Underwriting feeearned in respectofdevolvementsunderunderwritingcommitments, to theextentapportionabletothecostprotanto,arereducedfromthecostofsecuritiesdevolvingandtheremainingamountisreckonedasincome.
x. Front-end fees /Arrangers’ Fee
Front-end/Arrangers’feesreceivedonsubscriptiontoFI&OtherBondsarereckonedasincome.
xi. Brokerage and Commission Earned
Brokerageandcommissioninrespectofissuemarketingandresoursemobilisationareaccruedtotheextentofavailibilityofinformation.Portfoliomanagementandotherfeesareaccountedforonaccrualbasis.
xii. Interest Rate Swaps (IRS)
CashflowsonInterestRateSwaps(IRS)areaccountedforonaccrualbasisandsettledasperthetermsofthecontract.
xiii. Inthecaseofdiscountedinstruments,DiscountIncomerepresentstheexcessofsales(includingredemptionproceeds)andthevalueofclosingstockoverpurchases(includingsubscription)andopeningstockofsuchsecurities.
xiv. Dividendincomeisrecognisedwhentherighttoreceivedividendisestablished.
xv. Profit/LossfromtradinginEquitiesisrecognisedonthebasisofweightedaveragecostontradedates. Profit/Loss from trading in Government Securities, FI & Other Bonds, other securitiesarerecognisedonthebasisofweightedaveragecostonsettlementdates.
SCHEDULES FORMING PART OF THE ACCOUNTS
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xvi. Hedged Portfolio
(a) Securities
Securities or portfolio of securities are hedged using hedging instruments permitted byRBI such as Interest Rate Derivatives. The securities that are designated as hedged aretransferredtohedgeportfolioatlowerofcostormarketvalueonthedateofthehedge.
(b) Swap
Swapsthataredesignatedashedgetoanyassetaremarkedtomarketandthegainorlossonthehedgeswapandthehedgedportfolioissetoff;whiletheresultantnetlossisbeingprovided for, thenet gain is ignored.Gainsor losseson terminationor redesignationofhedgeswapsisrecognisedagainsttheoffsettinggainorlossrecognisedonthedesignatedassetorliability.
xvii. Interest Rate Futures:
a) TheinitialmarginandtheadditionalmarginpaidforenteringintocontractsforinterestratefuturesaredisclosedunderShortTermLoansandAdvances
b) The daily mark-to-market margin paid to/received from the clearing member in respect of Interest Rate Futures contracts are debited/credited on daily basiis and the same is provided under Short Term Loans and Advances or Current liabilities, as the case may be.
c) TheOpenpositionsaremarkedtomarketonthebalancesheetdate.Gains,ifany,arenotrecognized/providedforandlosses,ifany,areprovidedunderProvisionforLossonInterestRateFuturesAccount.
d) GainsorlossesonInterestRateFuturescontractsarerecognized,onFirstinFirstOutbasis,onsquaringupofpositionsorexpiryofcontracts,whicheverisearlier.
3. Foreign Exchange Transactions
Expensesandremittancesinforeigncurrencyareaccountedattheexchangeratesasonthetransactiondate.
4. Classification and Valuation of Stock-in-trade and Investments
i. Classification
Thesecuritiesacquiredwiththeintentionoftradinginthemareconsideredasstock-in-tradeandareshownundercurrentassets.Othersecuritiesacquiredwiththeintentionoflongtermholdingandearningincomeareconsideredasinvestments.Thestock-in-tradeisfurtherclassifiedintosixheadsforvaluationpurpose.i.e.Equityshares,preferenceshares,debenturesandbonds,Govt.securities(includingT-bills),MutualfundsandOthers.
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ii. Valuation
a) ThestockofGovernmentdatedsecurities(includingT-bills)areconsideredscripwiseandtheweightedaveragecost(carryingcostincaseofT-bills)andmarketvalueisaggregatedforallinvestments.Netdepreciation, if any, isprovided for/charged toProfit&Lossa/candnetappreciation,ifany,isignored.MarketvalueisdeterminedinaccordancewiththeguidelineslaiddownbyFixedIncomeMoneyMarketandDerivativesAssociationofIndia(FIMMDA).
b) ThestockofBondsanddebenturesareconsideredscripwiseandtheweightedaveragecostandmarketvalue isaggregatedforall investments.Netdepreciation, ifany , isprovidedfor/charged toProfit& Loss a/c andnet appreciation, if any, is ignored.Market value isdeterminedinaccordancewiththeguidelineslaiddownbyFixedIncomeMoneyMarketandDerivativesAssociationofIndia(FIMMDA).Asregardsthetaxfreebonds,forthepurposeofdeterminingmarketvaluepricequotedonthestockexchangesontherelevantdayisalsoconsidered.Itisvaluedatlowerofweightedaveragecost,marketvalueasdeterminedinaccordancewiththeguidelineslaiddownbyFixedIncomeMoneyMarketandDerivativesAssociationofIndia(FIMMDA)ormarketvalueasperstockexchange.
c) TheEquitysharesareconsideredscripwiseandtheweightedaveragecostandmarketvalueisaggregatedforallinvestments.Netdepreciation,ifany,isprovidedfor/chargedtoProfit&Lossa/candnetappreciation,ifany,isignored.Marketvalueisdeterminedbythepricesobtainedfromthestockexchange.
d) TheMutual Funds are considered schemewise and the weighted average cost and NetAssetValue(NAV)isaggregatedforallinvestments.Netdepreciation,ifany,isprovidedfor/chargedtoProfit&Lossa/candnetappreciation,ifany,isignored.
e) The stock of Commercial Papers and Certificates of Deposit held as stock-in-trade areconsideredscripwiseandcarryingcost(asexplainedatSl.No.2(iv)above)andmarketvalueisaggregatedforallinvestments.Netdepreciation,ifany,isprovidedfor/chargedtoProfit&Lossa/candnetappreciation,ifany,isignored(MarketvalueisdeterminedinaccordancewiththeguidelineslaiddownbyFixedIncomeMoneyMarketandDerivativesAssociationof India(FIMMDA)). In linewiththeFIMMDAguidelines,CertificateofDeposit(CDs)andCommercialPapers(CPs)oflessthanoneyeartenorarevaluedatcost.
f) ThestockofPassThroughCertificates(PTCs)heldasstock-in-tradearevaluedatcarryingcost(asexplainedatSl.No.2(vi)above)ormarketvaluewhicheverislower.MarketvalueisdeterminedinaccordancewiththeguidelineslaiddownbyFixedIncomeMoneyMarketandDerivativesAssociationofIndia(FIMMDA).
g) Investmentsotherthanstockintradearevaluedatcost,asreducedbyadeclineinvalueofotherthantemporarynature,ifany.Inthecaseofdebtinstrumentswherethecostofacquisitionismorethantheredemptionvalue,thedifferenceisamortizedovertheperiodremainingtomaturityandchargedtotheProfitandLossaccount.
h) TheoutstandingswapsheldfortradingpurposearemarkedtomarketontheBalanceSheetdateonthebasisofyieldratesannouncedbyFIMMDA.
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246
5. AmountsborrowedorlentunderCBLOarestatedatcarryingcost(asexplainedatSl.No.2(v)above).
6. GovernmentSecuritiesheldasHTMPortfolioarevaluedatamortisedcost.Thepremium,ifany,onthesecurityisamortisedovertheperiodtillmaturity.InrespectofGovernmentSecuritiesacquiredonHTMbasis,marketvalueatyearendisdeterminedanddisclosed.However,noaccountingadjustmentsaremadefordimunition/appreciationinvalueofsuchinvestments.
7. Thestock istransferredfromHTMPortfoliototradingportfolioatcost,bookvalueormarketvalue,whicheverislower.
8. Theprofitonsaleofsecurities,ifanyfromHTMPortfolioshallfirstbetakentotheProfit&LossAccountand thereafter be appropriated to the Capital Reserve Account (net of tax). Loss on sale shall berecognizedintheProfit&LossAccount
9. Fixed Assets & Depreciation
a) Fixed Assets
Fixed Assets are valued at original cost less accumulated depreciation. Costs include all directcostsattributabletoacquisition,installationandcommissioning.
b) Depreciation
DepreciationonfixedassetsisprovidedonthestraightlinemethodbasedontheUsefulLifeaspertheprovisionsunderScheduleIItotheCompaniesAct,2013w.e.f.01.04.2014.
TheCompanyhasappliedthefollowingUsefulLifeoftheassetsasperScheduleIIoftheCompaniesAct,2013:
Fixed Assets Useful Life as per Schedule II
Building 60years
Furniture&Fixtures 10years
MotorVehicles–MotorCars 8years
OfficeEquipments 5years
Computersanddataprocessingunits:
ServersandNetworks 6years
EndUserDevices 3years
ElectricalInstallationandEquipments 10years
Computer-Software 3years
10. Income Tax
ProvisionsforIncomeTaxcomprisesofthecurrenttaxprovisions,andthenetchangeinthedeferredtaxassetorliabilityfortheyear.Currenttaxisdeterminedastheamountoftaxpayableinrespectofthetaxableincomefortheyear.Deferredtaxassetorliabilityreflecttheimpactofcurrentyeartiming
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SCHEDULES FORMING PART OF THE ACCOUNTS
differencesbetweentaxableincomeandtheaccountingincomefortheyearandthereversaloftimingdifferencesofearlieryears.Deferredtaxassetsarerecognisedonlytotheextentthereisareasonablecertainty of sufficient future taxable income being available for its realisation. Deferred tax assetsandliabilitiesaremeasuredusingthetaxratesandtaxlawsthathavebeenenactedorsubstantivelyenactedbytheBalanceSheetdate.TheeffectondeferredtaxassetsandliabilitiesofachangeintaxratesisrecognisedintheProfitandLossAccountintheperiodofenactmentofthechange.
11. Retirement Benefits
i. TheCompany’scontributionspaid/payableduringtheyeartotheEmployees’ProvidentFundaredefinedcontributionand ischargedtothestatementofprofitand loss.There isnoobligationotherthanthemonthlycontributionpayabletotheRegionalProvidentFundCommissioner.
ii. ThegratuityliabilityofthecompanyisfundedthroughaGroupGratuitySchemewithLifeInsuranceCorporationofIndia(LIC)underwhichtheannualcontributionispaidtoLIC.Thecontributiontogratuityisaccruedonthebasisofactuarialvaluation.
iii. The liabilityonaccountofEmployees’LeaveEncashment isprovidedonthebasisofActuarialValuation,andisnotfunded.The“ProjectedUnitCreditMethod”hasbeenusedtodeterminetheliabilityofleaveencashment.
12. Borrowing Costs:
BorrowingcostotherthandirectlyattributedtoFixedAssetsaredirectlyrecognisedasexpensesintheperiodinwhichtheyareincurredandarechargedtorevenue.
13. Earning Per Share
Indeterminingbasicearningspershare,theCompanyconsidersthenetprofitaftertaxandincludesthepost-taxeffectofanyextra-ordinaryitems.Thenumberofsharesusedincomputingbasicearningspershareistheweightedaveragenumberofsharesoutstandingduringtheperiod.
B] OTHER NOTES
1. PreviousyearfigureshavebeenregroupedwhereverrequiredforthepresentationofFinancials.
2. InlinewiththeAccountingPolicyfollowedbytheCompany,thefall-in-valueofsecuritiesheldbytheCompanyasstock-in-trade(asdetailedbelow)hasbeenfullyprovidedfor.
(Amount - ` in lacs)
S No. Type of Security March 31, 2015 March 31, 2014
1. Governmentdatedsecurities(includingT-bills) Nil Nil
2. CorporateBondsincludingPSU/PFI Nil Nil
TOTAL Nil Nil
SCHEDULES FORMING PART OF THE ACCOUNTS
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3. Contingent Liability
a. ClaimsagainstCompanynotacknowledgedasdebt:Nil
b. Estimatedamountofcontractsremainingtobeexecutedoncapitalaccountinrespectof:
(Amount - ` in lacs)
Sno. Particulars March 31, 2015 March 31, 2014
1. ComputerSoftware(netofadvancesanddeposits)
5.97 22.16
c. Commitmentandcontractualobligationsinrespectof
i. ThepurchasesandsalesofthesecuritieseffectedonMarch31,2015,thetransactionshallbeaccountedonApril06,2015i.eSettlementdate.Thedetailsofthetransactionsisgivenbelowinthetable.
(Amount - ` in lacs)
Sno. Particulars March 31, 2015 March 31, 2014
1 Purchaseofsecurities 1,84,705.98 52,198.58
2 Saleofsecurities 1,83,152.06 61,661.86
ii. DisclosureonInterestRateSwaps:
(Amount - ` in lacs)
Sno. Particulars March 31, 2015 March 31, 2014
1. NotionalprincipalofInterestRateSwapsforTrading
2,68,711.36 88,551.93
2. NotionalPrincipalofInterestRateSwapsforHedging
Nil Nil
3. Markedtomarketpositionsontradingswaps
(295.84) (579.99)
Inaccordancewiththemarketpracticeandconsideringthecreditqualityofthecounterparties,theCompanyhasnottakenanycollateralinrespectofInterestRateSwaps.Thecreditexposuresonvariousswapcounterpartiesarewithinthepre-determinedriskparametersandarereviewedperiodically.
4. The Company has the following open positions in respect of Interest Rate Future Contracts on the Balance Sheet date:
Name of the Security Open Position
No. of Units Holding Rate Market Price
8.40%GS2024-30.04.2015 Short 1,32,88,000 104.43 104.47
SCHEDULES FORMING PART OF THE ACCOUNTS
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SCHEDULES FORMING PART OF THE ACCOUNTS
5. Expenditure in Foreign Currency :
(Amount - ` In lacs)
SNo. Particulars March 31, 2015 March 31, 2014
1 On Travel 0.13 1.60
2 On Interest Nil Nil
3 On Others 4.46 0.17
Earnings in Foreign Currency :NIL.(March31,2014–NIL)
6. Managerial Remuneration paid to Managing Director
(Amount - ` In lacs)
SNo. Particulars March 31, 2015 March 31, 2014
1 Salaries,allowances,perquisitesandPLVP*
160.83 90.01
2 Company'scontributiontoProvident Fund
2.80 2.02
*PLVPtobepaidinstaggeredmanner,tillMay2017,asperpolicy.
7. TheCompanyisamemberofPrimaryDealers’AssociationofIndiaandFixedIncomeMoneyMarketand Derivatives Association of India; which are Companies limited by guarantee and incorporatedundertheCompaniesAct,1956.TheamountguaranteedbytheCompanyonthisscoreamountsto`OneHundredonly,foreachAssociation.
8. TheCompanyisamemberoftheSecuritiesandCBLOsegmentofTheClearingCorporationofIndiaLimited.
9. Thestock-in-tradeasonMarch31,2015,includesGovernmentSecuritiesandTreasuryBillsofFaceValue`49,000.00LacsheldascollateralswithTheClearingCorporationofIndiaLimited(includes Government Securities and Treasury Bills of Face Value `48,600.00 Lacs as on March 31, 2014)
10. TheCompanyhadmadeaProvision for itsCorporateSocialResponsibility (CSR)activityasper theprovisionsofSection135oftheCompaniesAct,2013andrulesmadethereunderasamendedfromtimetotime.Theprovisionwasof`92,54,000/-,whichwasexpendedonMarch30,2015bywayofContributiontoPrimeMinisterNationalReliefFund.
11. The Interest Income and other income for the period endedMarch 31, 2015 includes Income-taxdeductedatsourceamountingto`400.04lacs(March 31, 2014 - `289.51 Lacs ).
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12. TheCompanyhasaccountedforthedeferredtaxassetandliabilityinrespectofthetimingdifferencesthroughtheProfitandLossAccount.ThecomponentsoftheDeferredTaxAsset/(Liability)areasunder:
(Amount - ` in lacs)
SNo. Particulars March 31, 2015 March 31, 2014
Deferred Tax Asset:
OpeningBalance 102.94 53.96
1 ProvisionforStampDuty 9.64 4.40
2 ProvisionforPerformanceLinkedIncentiveScheme
35.16 61.25
3 ProvisionforRetirementLeaveencashment 10.11 0.75
4 Deferred Tax Assets on Business losses --- ---
5 ProvisionforCorporateSocialResponsibilityActivities
--- ---
Total Deferred Tax Asset 157.85 120.36
Deferred Tax Liability:
5 ProvisionforPerformanceLinkedIncentiveScheme
--- ---
6 ProvisionforRetirementLeaveencashment --- ---
7 Depreciation (31.45) (17.42)
Total Deferred Tax Liability (31.45) (17.42)
Net Deferred Tax Asset/(Liability) 126.40 102.94
13. TheCompanyhasbeendealinginGovernmentSecuritiesonbehalfoftheConstituentsthroughtheConstituentSGLaccountopenedwithRBI.ThetransactionsundertakencoveramountsreceivedfromtheconstituentsandalsophysicalstenderedbythemforconversionintoSGLAccount.AsonMarch31,2015thefacevalueofthesecuritiesheldbytheCompanyonbehalfoftheconstituentsis̀ 11,92,996.80Lacs(March31,2014-`8,55,191.60Lacs).
14. Related Party disclosures
a. List of related parties:
i. Enterprises that directly or indirectly through one or more intermediaries control orcontrolledbyorareundercommancontrolwiththereportingenterprise:
HoldingCompany:STCIFinanceLimited (erstwhileSecuritiesTradingCorporationofIndiaLimited)
FellowSubsidiary:STCICommoditiesLimited
SCHEDULES FORMING PART OF THE ACCOUNTS
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SCHEDULES FORMING PART OF THE ACCOUNTS
ii. Keymanagementpersonnelandrelativesofsuchpersonnel:
1. ShriPradeepMadhav,ManagingDirector
2. ShriPrasannaPatankar,DeputyManagingDirector
3. ShriM.N.Suresh,ChiefFinancialOfficer
4. ShriKalpeshMody,CompanySecretary
b. Details of Related party transactions during the year:
(Amount - ` in lacs)
Nature of Transaction Related Party 2014-15 2013-14
PurchaseofGovernmentSecurities HoldingCompany Nil Nil
SaleofGovernmentSecurities HoldingCompany 5,565.21 Nil
Capital Expenditure HoldingCompany 3,731.20 Nil
Capital Receipt HoldingCompany Nil Nil
ReimbursementofExpenses(Payment) HoldingCompany 8.68 5.99
ReimbursementofExpenses(Received) HoldingCompany 2.05 0.85
SittingfeesPaid HoldingCompany 1.00 2.00
TotalRemuneration(includingSalaries,allowances,perquisites,Company’scontributiontoPFandPLVPtobepaidinstaggeredmanner,tillMay2017,asperpolicy)toKeyManagementPersonnel-
SNo. Key Managerial Personnel Designation March 31, 2015 March 31, 2014
1 Mr.PradeepMadhav ManagingDirector 163.63 92.03
2 Mr.PrasannaPatankar Dy.ManagingDirector 119.27 65.41
3 Mr.M.N.Suresh ChiefFinancialOfficer 72.86 46.76
4 Mr.KalpeshMody CompanySecretary 16.33 9.32
Allthetransactionsdetailedaboveareenteredintointheordinarycourseofbusiness.15. Segment Reporting
a. Business Segment : The Company has identified two business segments viz. Gilts segment andNon-Gilts segment
basedonrisk,returnandtheregulatoryauthoritiesforreportingastheprimarysegment.
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Thedetailedsegmentalinformationforthesegmentsisasunder:-
(Amount - ` in lacs)
Segmental Reporting
Gilts SegmentNon-Gilts Segment
Unallocated Total
REVENUES:- FromExternalClients 34,208.27
(24,124.16)7,022.23(4,783.61)
98.40(2.33)
41,328.90(28,910.10)
Internalsegment - - - -Total Revenue 34,208.27
(24,124.16)7,022.23(4,783.61)
98.40(2.33)
41,328.90(28,910.10)
Total Expenditure 22,065.16(11,024.29)
4,582.56(7,677.72)
1,519.71(1,232.12)
28,167.43(19,934.15)
Segment Result-Profit/ (-)Loss
12,143.11(13,099.87)
2,439.67(2,894.11)
-1,421.31(1,229.79)
13,161.47(8,975.97)
Less:Taxexpense (Nil) (Nil) 5,093.31(3,173.55)
5,093.31(3,173.55)
Less:PriorPeriodexpense (Nil) (Nil) 0.64(0.08)
0.64(0.08)
Total Result 8,067.52(5,802.34)
OTHER INFORMATION SegmentAssets 3,42,839.37
(1,93,820.97)72,838.10(78,508.29)
11,758.22(6,821.00)
4,27,435.69(2,79,150.26)
SegmentLiabilities 3,20,795.53(1,41,858.53)
60,561.68(1,00,221.50)
10,078.97(5,305.19)
3,91,436.18(2,47,385.22)
Note:FiguresinbracketsdenotefiguresforMarch31,2014
a. Segment Revenues and Expenses :
TheSegmental revenuesandexpenses includesall itemsdirectlyattributable to the respectivesegment.Administrativeexpenses, personnel costs anddepreciationonfixedassets cannotbeidentifiedwithanyparticularsegmentandareconsideredasunallocable.
b. Segment Assets and Liabilities :
TheSegmentalassetsandliabilitiesincludesallitemsdirectlyattributabletotherespectivesegment.AllotherassetsandliabilitiesnotattributabletoanyparticularsegmenthavebeengroupedunderUnallocatedAssetsandliabilities.
SCHEDULES FORMING PART OF THE ACCOUNTS
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SCHEDULES FORMING PART OF THE ACCOUNTS
c. Geographical Segment :
Sincethesegregationofthebusinessgeographicallyisnotpossible,inviewoftheManagement,theCompanydoesnothavegeographicalsegmentationinthecontextoftheAccountingStandard17onSegmentReportingissuedbytheInstituteofCharteredAccountantsofIndia.
16. In terms of the provisons of Reserve Bank of India guidelines, details of Repo and Reverse Repotransactionsduringtheyeararegivenhereunder:
(Amount - ` in lacs)
Minimum outstanding
during the year
Maximum outstanding during
the year
Daily Average outstanding
during the year
March 31, 2015
Securitiessoldunderrepos
Nil (497.82)
1,71,504.56(72,548.26)
89,551.12 (31,070.70)
70,087.09 (10,598.82)
Securitiespurchasedunder reverse repos
Nil (Nil)
59,170.84 (41,960.85)
2,455.49 (3,237.04)
Nil (Nil)
Note: Figures in brackets denote figures for March 31, 2014
17. In terms of the provisons of Non-Banking Financial Companies, Prudential Norms (Reserve Bank)Directions,1998,thefollowingdetailsaresubmitted:
(Amount - ` in lacs)
PARTICULARS Amount Outstanding Amount Overdue
2014-15 2013-14 2014-15 2013-14Liabilities side:
1 LoansandadvancesavailedbytheNBFCinclusive of interest accrued thereon butnotpaid:a) Debentures Nil Nil Nil Nil
b) Deferred Credits Nil Nil Nil Nil
c) TermLoans 39,400.00 19,500 Nil Nil
d) Inter-corporate loans andborrowings
5,346.84 1,910.62 Nil Nil
e) CommercialPaper Nil Nil Nil Nil
f) OtherLoans-(i) Call/Notice 39,500.00 40,500.00 Nil Nil(ii) CBLO 43,755.09 44,644.90 Nil Nil(iii) RBILAF 140,100.00 44,900.00 Nil Nil
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PARTICULARS Amount Outstanding Amount Overdue
2014-15 2013-14 2014-15 2013-14(iv) RBIRefinance 42,200.00 39,000.00 Nil Nil(v) LoanAgainstFixedDeposit Nil 37,750.00 Nil Nil(vi) REPOBorrowing 70,087.09 10,598.82 Nil Nil
Assets side :
2 Break-up of Loans and Advancesincluding bills receivables (other thanthoseincludedin(4)below):a) Secured Nil Nil Nil Nil
b) Unsecured Nil Nil Nil Nil
3 Break up Leased Assets and stock onhireandotherassetscountingtowardsAFCactivities
N.A. N.A. N.A. N.A.
4 Break-up of Investments
CurrentInvestments(Stock-in-trade)
1. Quoted
(i) (a) Equityshares Nil Nil Nil Nil
(b) Preference shares Nil Nil Nil Nil
(ii) DebenturesandBonds 23,843.89 16,633.43 Nil Nil
(iii) Unitsofmutualfunds Nil Nil Nil Nil
(iv) GovernmentSecurities&TreasuryBills
3,08,098.16 1,39,531.73 Nil Nil
(v) Others Nil Nil Nil Nil
2. Unquoted
i) Shares(a)Equity Nil Nil Nil Nil
(b)Preference Nil Nil Nil Nil
ii) DebenturesandBonds Nil Nil Nil Nil
iii) Unitsofmutualfunds Nil Nil Nil Nil
iv) GovernmentSecurities Nil Nil Nil Nil
v) Others Nil Nil Nil Nil
(a) CertificatesofDeposit 9,418.26 10,989.79
(b) CommercialPaper 4,692.53 9,689.25
SCHEDULES FORMING PART OF THE ACCOUNTS
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SCHEDULES FORMING PART OF THE ACCOUNTS
PARTICULARS Amount Outstanding Amount Overdue
2014-15 2013-14 2014-15 2013-14
Long-Term Investment1. Quoted
(i) Shares(a)Equity Nil Nil Nil Nil(b)Preference Nil Nil Nil Nil
(ii) DebenturesandBonds Nil Nil Nil Nil(iii) Unitsofmutualfunds Nil Nil Nil Nil(iv) GovernmentSecurities 31,380.63 50,801.95 Nil Nil(v) Others Nil Nil Nil Nil
2. Unquoted (i) Shares(a)Equity Nil Nil Nil Nil
(b)Preference Nil Nil Nil Nil(ii) DebenturesandBonds Nil Nil Nil Nil(iii) Unitsofmutualfunds Nil Nil Nil Nil(iv) GovernmentSecurities Nil Nil Nil Nil(v) Others Nil Nil Nil Nil
5 Borowergroup-wiseclassificationofallleasedassetsfinancedasin(2)and(3)above:
a.Relatedparties
b.Otherthanrelatedparties
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil6. Investorgroupwiseclassificationofall
investments(currentandlongterm)insharesandsecurities(bothquotedandunquoted)
a.Relatedparties
b.Otherthanrelatedparties
Nil
Nil
Nil
Nil
Nil
Nil
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18. IntermsofReserveBankofIndia’sguidelines,issuercompositionofinvestmentsinnon-Governmentsecuritiesisgivenhereunder:
(Amount - ` in lacs)No. Issuer Amount Extent of
private placement
Extent of 'below
investment grade'
securities
Extent of 'unrated' securities
Extent of 'unlisted' securities
(1) (2) (3) (4) (5) (6) (7)
1. PSUs 7,608.76(Nil)
7,608.76(Nil)
Nil Nil Nil
2. FIs 11,056.14(6,367.12)
11,056.14(6,367.12)
Nil Nil Nil
3. Banks 9,723.33(10,989.79)
9,723.33(10,989.79)
Nil Nil Nil
4. Other PDs Nil(Nil)
Nil(Nil)
Nil Nil Nil
5. Private Corporate 9,566.45(19,955.56)
9,566.45(19,955.56)
Nil Nil Nil
6. Subsidiaries/JointVentures
Nil(Nil)
Nil(Nil)
Nil Nil Nil
7. Others Nil(Nil)
Nil(Nil)
Nil Nil Nil
8. Provision held towards depreciation
Nil(Nil)
Nil(Nil)
Nil Nil Nil
Total 37,954.68(37,312.47)
37,954.68(37,312.47) Nil Nil Nil
Note: Figures in brackets denote previous years figures
19. DisclosureintermsofNotificationNo.DNBS.200/CGM(PK)-2008datedAugust01,2008underNon-BankingFinancial (Non-DepositAcceptingorHolding)CompaniesPrudentialNorms (ReserveBank)Directions,2007.
SNo. Items March 31, 2015 March 31, 2014
i. CRAR(%) 23.81 20.70
ii. CRAR-TierIcapital(%) 23.81 20.70
iii. CRAR-TierIICapital(%) Nil Nil
SCHEDULES FORMING PART OF THE ACCOUNTS
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a. Exposures to Real Estate Sector
(`.InLacs)
Category March 31, 2015 March 31, 2014a. Direct exposure
i. ResidentialMortgages- NIL NILLendingfullysecuredbymortgagesonresidentialpropertythatisorwillbeoccupiedbytheborrowerorthatisrented;(Individualhousingloansupto`15lacsmaybeshownseparately)
ii. CommercialRealEstate- NIL NILLendingsecuredbymortgagesoncommercialrealestates(officebuildings,retailspace,multipurposecommercialpremises,multi-familyresidentialbuildings,multi-tenantedcommercialpremises,industrialorwarehousespace,hotels,landacquisition,developmentandconstruction,etc.).Exposurewouldalsoincludenon-fundbased(NFB)limits;
iii. InvestmentsinMortgageBackedSecurities(MBS)andothersecuritizedexposures-a. Residential, NIL NILb. CommercialRealEstate. NIL NIL
b. Indirect Exposure Fundbasedandnon-fundbasedexposuresonHousingFinanceCompanies(HFCs).
5,219.93 8,824.32
b. Asset Liability Management Maturity Pattern of certain items of Assets and Liabilities.
(`.InCrores)
1 day to 30/31
days (one month
Over one
month to 2
months
Over 2 months upto 3
months
Over 3 months
to 6 months
Over 6 months
to 1 year
Over 1 year to 3 years
Over 3 years to 5 years
Over 5 years
Total
Liabilities
Borrowingsfrombanks
789.00 - - - - - - - 789.00
MarketBorrowings
2,964.85 - 50.04 - - - - - 3,014.89
Assets
Advances
Investments 3,774.33 - - - 340.00 - - 18.21 4,132.54
SCHEDULES FORMING PART OF THE ACCOUNTS
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20. MarginmoneyDepositwithILFSof`22.00lacsformeetingmarginrequirements(March 31, 2014 - `2.00 Crores)
21. No stamp duty has been paid on non-government securities transactions in view of the ongoingdeliberations between Government of Maharashtra and various representative bodies of theparticipantsviz.IBA,FIMMDA,PDAIandAMFI,ontheapplicabilityofstampdutyonnon-governmentsecurities’transactions.TheCompanyhassofarnotreceivedanyclaimforstampdutyfromtheStampOfficeinrespectofnon-governmentsecuritiestransactions.
Forthecurrentyear,provisionof`28.36lacs(March31,2014-`12.94lacs)calculatedonthebasisof0.01%ofthevalueoftransactionasstipulatedintheamendmenttotheBombayStampAct,1958announcedinMay2005,hasbeenmadeforstampdutyfordirectdealsofnongovernmentsecurities.TheprovisionasonMarch31,2015forstampdutyonnon-governmentsecuritiestransactionsstandsat `273.33lacs(March31,2014-`246.23lacs).TheamountofprovisionisincludedunderNoteno.6“Shorttermprovisions”inthebalancesheetandundertheheadfinancialchargesinNoteno.17“FinanceCost”inthestatementofprofitandloss.
22. ThefollowinginformationissubmittedasrequiredbytheReserveBankofIndia’sguidelinestoPrimaryDealersregardingpublicationoftheirauditedannualresults:
Net borrowings in call : Average net call borrowing during the period endedMarch 31, 2015was `301.76croresandpeaknetcallborrowingduringtheperiodendedMarch31,2015was`1,234.70crores.
Leverageratio:Averageduringtheyearwas9.19andpeakduringtheyearwas11.58
Quarterly CRAR (Capital ToRiskWeightedAsset Ratio) :Quarter ended June30, 2014– 22.40%,quarterendedSeptember30,2014–21.64%,quarterendedDecember31,2014–23.73%andquarterendedMarch31,2015–23.81%.
23. Gratuity:DisclosureintermsofRevisedAS-15(Amountin`)
Particulars March 31, 2015 March 31, 2014I Assumption as at
Mortality IALM(2006-08)Ult IALM(2006-08)UltInterest/Discountrate 8.70% 8.70%Rateofincreaseincompensation 5.00% 5.00%Rateofreturn(expected)onplanassets 7.77% 8.70%EmployeeAttritionRate 20% 20%Expectedaverageremainingservice 7.75 8.44
II Changes in present value of obligationsPVOatbeginningofperiod 4,859,411.00 23,70,172.00
SCHEDULES FORMING PART OF THE ACCOUNTS
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Particulars March 31, 2015 March 31, 2014Interest cost 407,150.00 1,90,799.00Current Service Cost 641,655.00 7,58,753.00BenefitsPaid (359,051.00) NilActuarial(gain)/lossonobligation 580,471.00 15,39,687.00PVOatendofperiod 6,129,636.00 48,59,411.00
III Changes in fair value of plan assetsFairValueofPlanAssetsatbeginningofperiod 3,310,903.00 22,25,645.00Adjustmenttoopeningbalance Nil 4,19,151.00Expected Return of Plan Assets 278,443.00 2,49,482.00Contributions 904,374.00 4,45,635.00BenefitPaid (359,051.00) NilActuarialgain/(loss)onPlanAssets (13,630.00) (29,010.00)FairValueofPlanAssetsatendofperiod 4,121,039.00 33,10,903.00
IV Actuarial Gain/(Loss) recognizedActuarialgain/(loss)fortheperiod(obligation) (580,471.00) (15,39,687.00)Actuarialgain/(loss)fortheperiod(Planassets) (13,630.00) (29,010.00)TotalGain/(Loss)fortheperiod (594,101.00) (1,568,697.00)Actuarialgain/(loss)recognisedfortheperiod (594,101.00) (1,568,697.00)Unrecognized Actuarialgain/(loss)fortheperiod Nil Nil
V Amounts to be recognized in the balance sheet
and statement of profit & loss accountPVOatendofperiod 6,129,636.00 48,59,411.00FairValueofPlanAssetsatendofperiod 4,121,039.00 33,10,903.00Funded Status (2,008,597.00) (15,48,508.00)UnrecognisedActurialGain/(Loss) Nil NilNetAsset/(Liability)recognizedinthebalancesheet
(2,008,597.00) (15,48,508.00)
VI Expenses recognized in the statement of P & L A/cCurrent Service Cost 641,655.00 7,58,753.00Interest Cost 407,150.00 1,90,799.00PastServiceCost–(nonvestedbenefits) Nil NilPastServiceCost–(vestedbenefits) Nil NilExpected Return on Plan Assets (278,443.00) (2,49,482.00)NetActuarial(Gain)/Lossrecognizedfortheperiod
594,101.00 15,68,697.00
ExpensesrecognizedinthestatementofP&LA/c 1,364,463.00 22,68,767.00a. Leave Encashment: The Company has made a provision of ` 29.77 lacs during the period ended March 31,
2015 for leave encashment on acturial valuation basis.
SCHEDULES FORMING PART OF THE ACCOUNTS
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SCHEDULES FORMING PART OF THE ACCOUNTS
23. Earning Per Share:
CalculationofEPS
Particulars March 31, 2015 March 31, 2014
Openingnumberofshares 16,60,00,000 16,60,00,000
Closingnumberofshares 15,00,00,000 16,60,00,000
WeightedaveragenumberofsharesforbasicEPS 16,54,73,973 16,60,00,000
Profit/(Loss)aftertaxes 80,67,52,000 58,02,34,000
EPS(Basic) 4.88 3.50
For and on behalf of the Board of DirectorsIn terms of our report of even date
For Chandabhoy & Jassoobhoy Chartered Accountant Firm Registration No.- 101647W
Samir M Chinoy Partner MembershipNo.:F-40853
Place:Mumbai Date: April21,2015
V R Iyer Chairperson
V Sridar Director
S Ravi Director
Pradeep Madhav ManagingDirector
M. N. Suresh ChiefFinancialOfficer
Kalpesh Mody CompanySecretary
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Particulars For the period ended March 31, 2015
For the period ended March 31, 2014
Net Profit before Taxation 13,161.47 8,975.97
Adjusted for:
Add: DepreciationonFixedAssets 96.64 144.45
Add: (Profit)/LossonsaleofAsset (0.31) (0.49)
Add: AmortisationonHTMSecuritiessoldduringtheyear
98.73 139.16
Less: PriorPeriodItem 0.64 0.08
Less: TaxonDistributedIncomeonBuybackofShare 482.93 -
Less: CorporateSocialResponsibilityExpenditure 92.54 -
Operating Profit before working capital changes 12,780.42 9,259.01
Increase/Decrease in Current Assets/Current Liabilities
(Increase)/DecreaseinStockinTrade (169,208.64) 7,075.58
(Increase)/DecreaseinShort-termloansandadvances
(37.82) (231.42)
(Increase)/DecreaseinOthercurrentassets 69.22 (638.69)
(Increase)/DecreaseinLong-termloansandadvances
(4.71) (15.13)
Increase/(Decrease)inLongTermProvisions 24.66 3.96
Increase/(Decrease)inShortTermBorrowings 139,584.68 17,030.08
Increase/(Decrease)inTradepayables (0.69) (1.07)
Increase/(Decrease)inOthercurrentliabilities (41.68) 46.36
Increase/(Decrease)inShort-termprovisions (149.86) (29,764.84) (553.09) 22,716.58
Cash generated from operation (16,984.42) 31,975.59
Less: Income Tax Paid 4,534.56 2,525.91
Net Cash flow from Operating Activities (A) (21,518.97) 29,449.68
(`inLacs)
CASH FLOW STATEMENT FOR THE YEAR ENDED MARCH 31, 2015
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Particulars For the period ended March 31, 2015
For the period ended March 31, 2014
Cash flow from Investing Activities
Less: PurchaseofSecurities (111,192.05) (102,999.90)
Add: Sale/TransferofSecuritiesfromHTMtoTrading 130,514.63 73,558.80
Less: Purchase of Fixed Assets (64.70) (31.84)
Add: SaleofAssets(IncludingProfits) 0.31 19,258.19 0.49 (29,472.45)
Net Cash Flow from Investing Activities (B) 19,258.19 (29,472.45)
Cash flow from Financing Activities
Less: Buybackofshares (3,731.20) -
(3,731.20) -
Net Cash Flow from Financing Activities (C) (3,731.20) -
Net increase in cash & cash equivalent (A+B+C) (5,991.98) (22.77)
Cash & cash equivalent at the beginning of the period 40,027.49 40,050.26
Cash & cash equivalent at the end of the period 34,035.51 40,027.49
(`inLacs)
CASH FLOW STATEMENT FOR THE YEAR ENDED MARCH 31, 2015
For and on behalf of the Board of DirectorsIn terms of our report of even date
For Chandabhoy & Jassoobhoy Chartered Accountant Firm Registration No.- 101647W
Samir M Chinoy Partner MembershipNo.:F-40853
Place:Mumbai Date: April21,2015
V R Iyer Chairperson
V Sridar Director
S Ravi Director
Pradeep Madhav ManagingDirector
M. N. Suresh ChiefFinancialOfficer
Kalpesh Mody CompanySecretary
STCI FINANCE LIMITED
STCI COMMODITIES LIMITED
Annual Report For The Year Ended
31st March, 2015
STCI COMMODITIES LIMITED
264
STCI COMMODITIES LIMITED
265
01 Directors’ Report 267
02 Auditors’ Report 278
03 Balance Sheet 283
04 ProfitandLossStatement 285
05 Notes to Accounts 286
06 SummaryofSignificantAccountingPoliciesandNotestoAccounts 291
07 CashFlowStatement 294
Contents
IV. STCI COMMODITIES LIMITED
STCI COMMODITIES LIMITED
266
TO THE SHAREHOLDERS OF
STCI Commodities Limited
The Directors take pleasure in presenting the Eleventh Annual Report of the Companywith the auditedaccountsfortheyearendedMarch31,2015.
FINANCIAL RESULTS (` in Lakhs )
March 31,2015 March 31,2014
TotalIncome
Total expenses
Profit/(Loss)beforetaxes
Tax expenses
NetProfit/(Loss)aftertax
9.74
2.44
7.30
0.66
6.64
9.46
7.53
1.93
-
1.93
PERFORMANCE
SinceyourCompanydiscontinueditscommoditybrokingoperationswitheffectfromSeptember20,2011,ithasbeenliquidatingitsassets,payingoffitsclientsduesandsettlingitspendinglegalcases.TheCompanyhasalsosubmittedanapplicationforsurrenderofitsmembershipwithMultiCommodityExchange(MCX)andNationalCommodityandDerivativeExchange(NCDEX).
YourCompanyreportedaprofitbeforetaxof`7.30lakhfortheyearendedMarch31,2015asagainstaprofitbeforetaxof`1.93lakhinthepreviousyear.TheProfitaftertaxwas`6.64lakhasagainst`1.93Lakhinthepreviousyear.
INTEREST INCOME
Your companyhasearned interest incomeof` 9.02 Lakhonbank’s FDRduring theyearunder reviewasagainstaninterestincomeof`8.20Lakhinthepreviousyear.
DIVIDEND
TheBoardofDirectorshasnotrecommendedanydividendforthecurrentyear,duetoinadequateprofits.
KEY FORWARD
Onreceiptofrequisiteapprovals fromtheconcernedregulatoryauthorities,necessarystepswillbetakento apply for dormant status of the Company or alternatively close the Company subject to fulfilling therequirementsunder theCompaniesAct,2013orGuidelinesof theMinistryofCorporateaffairsorotherapplicablelawsorRegulations.
DIRECTORS’ REPORT
STCI COMMODITIES LIMITED
267
BOARD OF DIRECTORS
IntermsoftheprovisionsoftheCompaniesAct,2013andtheArticlesofAssociation,ShriDSRMurthyretiresbyrotationatthisAnnualGeneralMeetingand,beingeligible,offershimselfforre-appointment.
ThebriefparticularsoftheDirectortobeappointed/re-appointedattheensuingAnnualGeneralMeetingisfurnishedinAnnexuretotheNoticefortheensuingAnnualGeneralMeeting.
Number of Board Meetings: Duringthefinancialyear2014-15,fourmeetingsoftheBoardofDirectorswereheld.
DIRECTOR’S RESPONSIBILITY STATEMENT
PursuanttoSection134oftheCompaniesAct,2013,theDirectorconfirmsthat:
a) InthepreparationofAnnualAccounts,theapplicableaccountingstandardshavebeenfollowedandthattherearenomaterialdepartures.
b) Appropriateaccountingpolicieshavebeenselectedandappliedthemconsistentlyandmadejudgmentsandestimatesmadearereasonableandprudentsoastogivetrueandfairviewofthestateofaffairsofthecompanyattheendofthefinancialyearandtheprofitofthecompanyforthatperiod.
c) Properandsufficientcarehasbeentakentothebestoftheirknowledgeandtheabilityformaintenanceof adequate accounting records in accordancewith theprovisions of theCompaniesAct, 2013, forsafeguardingtheassetsofthecompanyandforpreventinganddetectingfraudandotherirregularities.
d) TheAnnualAccountshavenotbeenpreparedonagoingconcernbasis.
e) Propersystemshavebeendevisedtoensurecompliancewiththeprovisionsofallapplicablelawsandsuchsystemswereadequateandoperatingeffectively.
AUDITORS
CNK&Associates LLP, Chartered Accountants,Mumbaiwere appointed as the Statutory Auditors of theCompanyforthefinancialyear2014-15.
EXTRACT OF ANNUAL RETURN
TheextractofannualreturnintheprescribedformMGT-9asprovidedundersection92(3)oftheCompaniesAct,2013isannexedtotheReportasAnnexureI.
RELATED PARTY TRANSACTIONS
Alltransactionsenteredintowiththerelatedpartiesreferredtoundersection188(1)oftheCompaniesAct,2013duringtheyearareintheordinarycourseofbusinessandonarmslengthbasis.Therearenomaterially
DIRECTORS’ REPORT
STCI COMMODITIES LIMITED
268
DIRECTORS’ REPORT
significantrelatedpartytransactionsmadebytheCompanywiththePromotersorDirectorsorotherrelatedpartieswhichmay have a potential conflictwith the interest of the Company at large. The particulars ofcontractsorarrangementsenteredintowithrelatedpartiesreferredtounderSection188(1)inFormAOC-1isenclosedasAnnexureII.
PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS
DetailsregardingLoans,GuaranteesorInvestmentsmadebytheCompanyhavebeengiveninthenotestotheFinancialStatements.
OTHER DISCLOSURES
NostatementcontainingparticularsofemployeesasrequiredunderRule5(2)oftheCompanies(AppointmentandRemunerationofManagerialPersonnel)Rules2014isbeingannexedtotheReportasthereisnoemployeedrawingremunerationinexcessoftheprescribedamount.
ThedisclosurespertainingtoConservationofEnergyandTechnologyAbsorptionarenotapplicabletoyourcompany,asyourcompanyisnotamanufacturingcompany.
Therewasnooutgoofforeignexchangeduringtheyear.
PUBLIC DEPOSITS
YourCompanyhasnotacceptedanydepositsfromthepublicduringthefinancialyear2014-15.
ACKNOWLEDGEMENT
TheBoardofDirectorsexpresstheirsincereappreciationtoForwardMarketCommission,MCX,NCDEX,NSPOT,Company’sBankersandourparentcompany,STCIFinanceLimitedfortheirsupportandguidance.TheBoardofDirectorsalsoplacesonrecordtheirappreciationofthededicatedperformancebytheemployees.
OnbehalfoftheBoardofDirectors. Mumbai D S R MurthyDate:20thApril,2015 Chairman
STCI COMMODITIES LIMITED
269
ANNEXURE I
Form No. MGT-9
EXTRACT OF ANNUAL RETURN asonthefinancialyearendedonMarch31,2015
[Pursuanttosection92(3)of the Companies Act, 2013 andrule12(1)oftheCompanies (ManagementandAdministration)Rules,2014]
I.REGISTRATION AND OTHER DETAILS:
i) CIN U67120MH2004PLC148711ii) RegistrationDate 20/09/2004iii) NameoftheCompany STCICommoditiesLimitediv) Category/Sub-CategoryoftheCompany PublicCompanylimitedbyshares/NBFCv) AddressoftheRegisteredofficeandcontact
detailsA/B1-802,A-Wing,8THFloor, MarathonInnova,MarathonNextgenCompound,Off.GanpatraoKadamMarg,LowerParel,Mumbai-400013.Tel:+91-22-61425115/100Fax:+91-2224991092E-mailid:[email protected].
vi) Whetherlistedcompany Novii) Name,AddressandContactdetailsofRegistrar
andTransferAgent,ifanySharepro Services (India) Private Limited Address:13AB,SamhitaWarehousingComplex,Sakinaka Telephone Exchange Lane, Sakinaka,Andheri(East),Mumbai-400072.Tel:+91-22-67720329Fax:+91-22-28508927E-mailid:[email protected]
II. PRINCIPAL BUSINESS ACTIVITIES OF THE COMPANY
(Allthebusinessactivitiescontributing10%ormoreofthetotalturnoverofthecompanyshallbestated)
Sr. No.
Name and Description of main products / services
NIC Code of the Product/service
% to total turnover of the company
1 *Notapplicable
*TheCompanyhasdiscontinueditsCommoditybrokingoperationsw.e.fSeptember20,2011
III. PARTICULARS OF HOLDING, SUBSIDIARY AND ASSOCIATE COMPANIES
Sr. No.
Name and Address of the Company
CIN / GLN Holding/ Subsidiary /
Associate
% of Shares Held
Applicable Section
1. STCIFinanceLimited U51900MH1994PLC078303 Holding 100% 2(46)
STCI COMMODITIES LIMITED
270
IV. SHARE HOLDING PATTERN (Equity Share Capital Breakup as percentage of Total Equity)
i) Category-wise Share Holding
Category of Shareholders
No. of Shares held at the beginning of the year
No. of Shares held at the end of the year % Change during
the yearDemat Physical Total % of
Total Shares
Demat Physical Total % of Total
Shares
A. Promoters
(1) Indian
a) Individual/HUF - - - - - - - - -
b) CentralGovt. - - - - - - - - -
c) StateGovt.(s) - - - - - - - - -
d) BodiesCorp. 4470000 - 4470000 99.34 4470,000 - 4470000 99.34 Nil
e) Banks/FI - - - - - - - - -
f) Anyother - 30000 30000 0.66 - 30000 30000 0.66 -
Sub-total (A) (1): 4470000 30000 4500000 100% 4470000 30000 4500000 100 Nil
(2) Foreign
a) NRI’s- Individuals
- - - - - - - - -
b) Other-Individuals
- - - - - - - - -
c) BodiesCorp. - - - - - - - - -
d) Banks/FI - - - - - - - - -
e) AnyOther - - - - - - - - -
Sub-total (A) (2): - - - - - - - - -
Total Shareholding Promoter (A) = (A)(1) + (A)(2)
- - - - - - - - -
B. Public Shareholding
1. Institutions
a) MutualFunds - - - - - - - - -
b) Banks/FI -
c) CentralGovt. - - - - - - - - -
d) StateGovt.(s) - - - - - - - - -
e) Venture Capital Funds
- - - - - - - - -
f) Insurance Companies
-
g) FIIs - - - - - - - - -
h) ForeignVentureCapital Funds
- - - - - - - - -
i) Others(specify) - - - - - - - - -
Sub-total (B)(1): - - - - - - - - -
STCI COMMODITIES LIMITED
271
2.
Non-Institutions - - - - - - - - -
a) BodiesCorp. - - - - - - - - -
i)Indian - - - - - - - - -
ii)Overseas - - - - - - - - -
b) Individuals - - - - - - - - -
i)Individualshareholders holdingnominalshare capital upto ` 1 lakh
- - - - - - - - -
ii)Individualshareholders holdingnominalshare capital inexcessof`1 lakh
- - - - - - - - -
c) Others(specify) - - - - - - - - -
Sub-total (B)(2): - - - - - - - - -
TotalPublicShareholding(B)=(B)(1)+(B)(2)
- - - - - - - - -
C. Shares held by Custodian for GDRs & ADRs
- - - - - - - - -
Grand Total (A+B+C) 4470000 30000 4500000 100% 4470000 30,000 4500000 100 Nil
ii) Shareholding of Promoter-
Sr. No.
Shareholder’s Name
Shareholding at the beginning of the year
Share holding at the end of the year % change in share holding during
the yearNo. of Shares
% of total
Shares of the
company
%of Shares Pledged /
encumbered to total shares
No. of Shares % of total Shares of the
company
%of Shares Pledged /
encumbered to total shares
1 STCIFinanceLtd 4470000 99.34 Nil 4470000 99.34 Nil Nil
2 STCIFinanceLtdjointlywithRajivRanjan
5000 0.11 Nil 5000 0.11 Nil Nil
3 STCIFinanceLtdjointlywithDeepakPaharya
5000 0.11 Nil 5000 0.11 Nil Nil
4 STCIFinanceLtdjointlywithKamleshRathi
5000 0.11 Nil 5000 0.11 Nil Nil
STCI COMMODITIES LIMITED
272
Sr. No.
Shareholder’s Name
Shareholding at the beginning of the year
Share holding at the end of the year % change in share holding during
the yearNo. of Shares
% of total
Shares of the
company
%of Shares Pledged /
encumbered to total shares
No. of Shares % of total Shares of the
company
%of Shares Pledged /
encumbered to total shares
5 STCIFinanceLtdjointlywithSuparnaSharma
5000 0.11 Nil 5000 0.11 Nil Nil
6 STCIFinanceLtdjointlywithSabitaBraganza
5000 0.11 Nil 5000 0.11 Nil Nil
7 STCIFinanceLtdjointlywithAlokePrasad
5000 0.11 Nil 5000 0.11 Nil Nil
Total 4500000 100 Nil 4500000 100 Nil Nil
iii) Change in Promoters’ Shareholding (please specify, if there is no change)
Sr. No.
Particulars Shareholding at the beginningof the year
Cumulative Shareholding during the year
No. of shares % of totalshares of the
company
No. of shares % of totalshares of the
company
1 Atthebeginningoftheyear 4470000 99.34 4470000 99.34
DatewiseIncrease/DecreaseinPromotersShareholdingduringtheyearspecifyingthereasons
Nochangeintheshareholding
Attheendoftheyear 4470000 99.34 4470000 99.34
2 Atthebeginningoftheyear 5000 0.11 5000 0.11
DatewiseIncrease/DecreaseinPromotersShareholdingduringtheyearspecifyingthereasons
Nochangeintheshareholding
Attheendoftheyear 5000 0.11 5000 0.11
3 Atthebeginningoftheyear 5000 0.11 5000 0.11
DatewiseIncrease/DecreaseinPromotersShareholdingduringtheyearspecifyingthereasons
Nochangeintheshareholding
Attheendoftheyear 5000 0.11 5000 0.11
4 Atthebeginningoftheyear 5000 0.11 5000 0.11
DatewiseIncrease/DecreaseinPromotersShareholdingduringtheyearspecifyingthereasons
Nochangeintheshareholding
Attheendoftheyear 5000 0.11 5000 0.11
5. Atthebeginningoftheyear 5000 0.11 5000 0.11
DatewiseIncrease/DecreaseinPromotersShareholdingduringtheyearspecifyingthereasons
Nochangeintheshareholding
Attheendoftheyear 5000 0.11 5000 0.11
6. Atthebeginningoftheyear 5000 0.11 5000 0.11
DatewiseIncrease/DecreaseinPromotersShareholdingduringtheyearspecifyingthereasons
Nochangeintheshareholding
STCI COMMODITIES LIMITED
273
Sr. No.
Particulars Shareholding at the beginningof the year
Cumulative Shareholding during the year
No. of shares % of totalshares of the
company
No. of shares % of totalshares of the
company
Attheendoftheyear 5000 0.11 5000 0.11
7 Atthebeginningoftheyear 5000 0.11 5000 0.11
DatewiseIncrease/DecreaseinPromotersShareholdingduringtheyearspecifyingthereasons
Nochangeintheshareholding
Attheendoftheyear 5000 0.11 5000 0.11
iv) Shareholding Pattern of top ten Shareholders:
(other than Directors, Promoters and Holders of GDRs and ADRs):
S. N For Each of the Top 10 Shareholders Shareholding at the beginningof the year
Cumulative Shareholding during the year
No. of shares
% of totalshares of the
company
No. of shares
% of totalshares of the
company
1 Atthebeginningoftheyear - - - -
Datewiseincrease/decreaseinshare-holdingduringtheyearalongwithreasons
-
Attheendoftheyear - - - -
2 Atthebeginningoftheyear - - - -
Datewiseincrease/decreaseinshare-holdingduringtheyearalongwithreasons
-
Attheendoftheyear - - - -
3. Atthebeginningoftheyear - - - -
Datewiseincrease/decreaseinshare-holdingduringtheyearalongwithreasons
-
Attheendoftheyear - - - -
4. Atthebeginningoftheyear - - - -
Datewiseincrease/decreaseinshare-holdingduringtheyearalongwithreasons
-
Attheendoftheyear - - - -
5. Atthebeginningoftheyear - - - -
Datewiseincrease/decreaseinshare-holdingduringtheyearalongwithreasons
-
Attheendoftheyear - - - -
STCI COMMODITIES LIMITED
274
v) Shareholding of Directors and Key Managerial Personnel:
S. No. Form each of Directors and KMP
Shareholding at the beginningof the year
Cumulative Shareholding during theYear
No. of shares % of totalshares of the
company
No. of shares % of totalshares of the
company
1 Atthebeginningoftheyear
NoneoftheDirectorsholdanysharesintheCompany.
Datewise increase/decrease inshare-holding during the yearalongwithreasons
Attheendoftheyear
V) INDEBTEDNESS
IndebtednessoftheCompanyincludinginterestoutstanding/accruedbutnotdueforpayment
(`inLakhs)
Secured Loans excluding deposits
Unsecured Loans
Deposits Total Indebtedness
Indebtedness at the beginning of the financial year
i) PrincipalAmount - - - -
ii) Interestduebutnotpaid - - - -
iii) Interestaccruedbutnotdue - - - -
Total (i+ii+iii) - - - -
Change in Indebtedness during the financial year - - - -
i) Addition(issueofNCDsduringtheyear) - - - -
ii) Reduction - - - -
Net Change - - - -
Indebtedness at the end of the financial year - - - -
i) PrincipalAmount - - - -
ii) Interestduebutnotpaid - - - -
iii) Interestaccruedbutnotdue - - - -
Total (i+ii+iii) - - - -
STCI COMMODITIES LIMITED
275
VI. REMUNERATION OF DIRECTORS AND KEY MANAGERIAL PERSONNEL-
A.Remunerationto*ManagingDirector,Whole-timeDirectorsand/orManager: (`inLakhs)
Sr. No.
Particulars of Remuneration Name of MD/WTD/ Manager Total Amount
1 Grosssalary - -(a) Salaryasperprovisionscontainedinsection
17(1)oftheIncome-taxAct,1961(b) (b)Valueofperquisitesu/s17(2)Income-tax
Act,1961- -
(c) Profitsinlieuofsalaryundersection17(3)Income-taxAct,1961
- -
2 StockOption - -3 SweatEquity - -4 Commission
-as%ofprofit -others,specify…
- -
5 Others,pleasespecify - -Total (A) - -CeilingaspertheAct - -
* TheCompanydoesnothaveaManagingDirector,wholetimeDirectorormanager
B. Remuneration to other directors
(`inLakhs)
Sr. No.
Particulars of Remuneration Name of Directors Total Amount
1 Independent Directors - - - (a) Feeforattendingboard/
committeemeetings- - - -
(b) Commission - - - - (c) Others,pleasespecify - - - -Total(1) - - - -
2 OtherNon-ExecutiveDirectors DSRMurthy PradeepMadhav S.Venkateswarlu(a) Feeforattendingboard
committeemeetings0.20 0.20 0.20 0.60
(b) Commission - - - - (c) Others,pleasespecify - - - -
Total(2) 0.20 0.20 0.20 0.60 Total(B)=(1+2) 0.20 0.20 0.20 0.60
TotalManagerial Remuneration
0.60
OverallCeilingaspertheActFor(B)-RemunerationtootherDirectorsbywayofsittingfeesforattendingeachmeetingofBoardorCommittee
Sittingfeesof`1lakhforeach director forattendingeachmeetingoftheBoardor
Committeethereof
STCI COMMODITIES LIMITED
276
C. Remuneration to *Key Managerial Personnel Other Than MD / Manager / WTD
Sr. No.
Particulars of Remuneration Key Managerial Personnel
CEO CS CFO Total
1 Grosssalary (a)Salaryasperprovisionscontainedinsection17(1)oftheIncome-taxAct,1961
- - - -
(b)Valueofperquisitesu/s17(2)Income-taxAct,1961
- - - -
(c)Profitsinlieuofsalaryundersection17(3)Income-taxAct,1961
- - - -
2 StockOption - - - -3 SweatEquity - - - -4 Commission - - - -
-as%ofprofit - - - --Others,specify…… - - - -
5 Others,pleasespecify - - - -Total - - - -
*TheCompanydoesnothaveanyKeyManagerialPersonnel.
VII. PENALTIES / PUNISHMENT/ COMPOUNDING OF OFFENCES:
Type Section of the Companies Act
Brief Description
Details of Penalty / Punishment/
Compounding fees imposed
Authority [RD / NCLT/
COURT]
Appeal made, if any (give
Details)
A. COMPANY
Penalty - - - - -
Punishment - - - - -
Compounding - - - - -
B. DIRECTORS
Penalty - - - - -
Punishment - - - - -
Compounding - - - - -
C. OTHER OFFICERS IN DEFAULT
Penalty - - - - -
Punishment - - - - -
Compounding - - - - -
ByOrderoftheBoard ForSTCICommoditiesLimited
DSR Murthy Chairman
(DIN: 00012014)
STCI COMMODITIES LIMITED
277
ANNEXURE II
FORM NO. AOC.2 Form for disclosure of particulars of contracts/arrangements entered into by the company with related parties referred to in sub-section (1) of section 188 of the Companies Act, 2013 including certain arms
length transactions under third proviso thereto
(Pursuant to clause (h) of sub-section (3) of section 134 of the Act and Rule 8(2) of the Companies (Accounts) Rules, 2014)
1. Detailsofcontractsorarrangementsortransactionsnotatarm’slengthbasis- NIL
(a) Name(s)oftherelatedpartyandnatureofrelationship-N.A
(b) Natureofcontracts/arrangements/transactions-N.A
(c) Durationofthecontracts/arrangements/transactions-N.A
(d) Salienttermsofthecontracts/arrangements/transactionsincludingvalue,ifany-N.A
(e) Justificationforenteringintosuchcontractsorarrangementsortransactions-N.A
(f) date(s)ofapprovalbytheBoard-N.A
(g) Amountpaidasadvances,ifany:-N.A
(h) Dateofpassingspecialresolutioningeneralmeetingundersection188- N.A
2. Detailsofmaterialcontractsorarrangementortransactionsatarm’slengthbasis: All transactionsentered intobytheCompanywithrelatedpartiesduringtheyearendedMarch31,
2015areinordinarycourseofbusinessandatarmslengthbasis. DetailsoftransactionswithrelatedpartiesatanaggregatelevelforthefinancialyearendedMarch31,2015:
Sr. No.
Name(s) of the related party and nature of
relationship
Nature of contract/
arrangement
Duration of contract/
arrangement/ transaction
Salient terms of the contract/arrangements/
transactions including value,
if any
Amount (in
`Lakhs )
Date of Board
approval, if any
Amount paid as
advances, if any
6. STCI Finance Limited–HoldingCompany
SittingfeespaidforattendingBoard Meetings
N.A Sittingfeesof `5000/-paidforeachmeetingofBoardattendedbyNomineesofSTCIFinanceLimited.
0.40 - -
OnbehalfoftheBoardofDirectors.
Mumbai D S R Murthy Date:20thApril,2015 Chairman (DIN: 00012014)
STCI COMMODITIES LIMITED
278
TO THE MEMBERS OF STCI COMMODITIES LIMITED.
Report on the Standalone Financial Statements
1. WehaveauditedtheaccompanyingstandalonefinancialstatementsofSTCICommoditiesLimited(“theCompany”),whichcomprisetheBalanceSheetasatMarch31,2015,andtheStatementsofProfitandLossandCashFlowfortheyearthenended,andasummaryofthesignificantaccountingpoliciesandotherexplanatoryinformation.
Management’s Responsibility for the Financial Statements
2. The Company’s Board of Directors is responsible for the matters stated in Section 134(5) of theCompanies Act, 2013 (“the Act”) with respect to the preparation of these standalone financialstatementsthatgiveatrueandfairviewofthefinancialposition,financialperformanceandcashflowsof theCompany inaccordancewiththeaccountingprinciplesgenerallyaccepted in India, includingtheAccountingStandardsspecifiedunderSection133oftheAct,readwithRule7oftheCompanies(Accounts) Rules, 2014 (as amended).This responsibility also includes maintenance of adequateaccounting records inaccordancewith theprovisionsof theAct for safeguarding theassetsof theCompanyandforpreventinganddetectingfraudsandotherirregularities;selectionandapplicationofappropriateaccountingpolicies;makingjudgmentsandestimatesthatarereasonableandprudent;and design, implementation and maintenance of adequate internal financial controls, that wereoperatingeffectivelyforensuringtheaccuracyandcompletenessoftheaccountingrecords,relevanttothepreparationandpresentationofthefinancialstatementsthatgiveatrueandfairviewandarefreefrommaterialmisstatement,whetherduetofraudorerror.
Auditor’s Responsibility
3. Our responsibility is to express an opinion on these standalonefinancial statements basedonouraudit.
4. Wehave taken into account the provisions of theAct, the accounting and auditing standards andmatterswhicharerequiredtobeincludedintheauditreportundertheprovisionsoftheActandtheRulesmadethereunder.
5. WeconductedourauditinaccordancewiththeStandardsonAuditingspecifiedunderSection143(10)oftheAct.ThoseStandardsrequirethatwecomplywithethicalrequirementsandplanandperformtheaudittoobtainreasonableassuranceaboutwhetherthefinancialstatementsarefreefrommaterialmisstatement.
6. An audit involves performing procedures to obtain audit evidence about the amounts and thedisclosuresinthefinancialstatements.Theproceduresselecteddependontheauditor’s judgment,includingtheassessmentoftherisksofmaterialmisstatementofthefinancialstatements,whetherdue to fraud or error. In making those risk assessments, the auditor considers internal financialcontrol relevant to theCompany’spreparationof thefinancial statements thatgivea trueand fairviewinordertodesignauditproceduresthatareappropriate inthecircumstances,butnotforthepurposeofexpressinganopiniononwhethertheCompanyhasinplaceanadequateinternalfinancial
INDEPENDENT AUDITORS’ REPORT
STCI COMMODITIES LIMITED
279
controlssystemoverfinancialreportingandtheoperatingeffectivenessofsuchcontrols.AnauditalsoincludesevaluatingtheappropriatenessoftheaccountingpoliciesusedandthereasonablenessoftheaccountingestimatesmadebytheCompany’sDirectors,aswellasevaluatingtheoverallpresentationofthefinancialstatements.
7. Webelievethattheauditevidencewehaveobtainedissufficientandappropriatetoprovideabasisforourauditopiniononthestandalonefinancialstatements.
Opinion
8. Inouropinionandtothebestofourinformationandaccordingtotheexplanationsgiventous,theaforesaidstandalonefinancialstatementsgivetheinformationrequiredbytheActinthemannersorequiredandgiveatrueandfairviewinconformitywiththeaccountingprinciplesgenerallyacceptedinIndiaofthestateofaffairsoftheCompanyasatMarch31,2015anditslossanditscashflowsfortheyearendedonthatdate.
Emphasis of matter
9. WedrawattentiontoNote8tothefinancialstatements,duringthefinancialyear2011-12;thecompanyhadtakendecision todiscontinuethecommoditybrokingbusiness.Accordingly, theaccountshavenotbeenpreparedontheassumptionofgoingconcernbasis.Further, thecompanyhassubmittedanapplicationwithCommoditiesExchangesa)NationalCommodity&DerivativesExchangeLimited(NCDEX)andb)MultiCommodityExchangeforSurrenderofMembershipon25/10/2013.
TheaccumulatedlossesoftheCompanyattheendoftheyearhaveexceededfiftypercentofitsnetworth.
Ouropinionisnotmodifiedinrespectofthesematters.
Report on Other Legal and Regulatory Requirements
10. AsrequiredbytheCompanies(Auditor’sReport)Order,2015, issuedbytheCentralGovernmentofIndia intermsofsub-section(11)ofsection143oftheAct(the“Order”),andonthebasisofsuchchecksofthebooksandrecordsoftheCompanyasweconsideredappropriateandaccordingtotheinformationandexplanationsgiventous,wegiveintheAnnexureastatementonthemattersspecifiedinparagraphs4and5oftheOrder.
11. AsrequiredbySection143(3)oftheAct,wereportthat:
a. we have sought and obtained all the information and explanations which to the best of ourknowledgeandbeliefwerenecessaryforthepurposeofouraudit;
b. inouropinionproperbooksofaccountasrequiredbylawhavebeenkeptbytheCompanysofarasitappearsfromourexaminationofthosebooks;
c. theBalanceSheet,theStatementofProfitandLossandCashFlowdealtwithbythisReportareinagreementwiththebooksofaccount;
INDEPENDENT AUDITORS’ REPORT
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d. Inouropinion,theaforesaidfinancialstatementscomplywiththeAccountingStandardsspecifiedunder Section 133 of the Act, readwith Rule 7 of the Companies (Accounts) Rules, 2014 (asamended);
e. Thefinancialstatementsofthecompanyhavenotbeenpreparedontheassumptionsofgoingconcern. Thegoing concernmatterhasbeendescribed inparagraph9under theEmphasisofMattersparagraphabove.
f. OnthebasisofwrittenrepresentationsreceivedfromthedirectorsasonMarch31,2015takenonrecordbytheBoardofDirectors,noneofthedirectorsisdisqualifiedasonMarch31,2015,frombeingappointedasadirectorintermsofSection164(2)oftheAct.
g. WithrespecttotheothermatterstobeincludedintheAuditor’sReportinaccordancewithRule11oftheCompanies(AuditandAuditors)Rules,2014(asamended),inouropinionandtothebestofourinformationandaccordingtotheexplanationsgiventous:
i. TheCompanyhasdisclosedtheimpactofpendinglitigationswhichwouldimpactitsfinancialpositioninthefinancialstatements.Refernote13tothefinancialstatements.
ii. TheCompanydidnothaveanylong-termcontractsincludingderivatecontractsforwhichtherewereanymaterialforeseeablelosses.
iii. TherewerenoamountswhichwererequiredtobetransferredtotheInvestorEducationandProtectionFundbytheCompany.
For CNK & Associates LLPChartered Accountants
FirmRegistrationNumber:101961W
Hiren ShahPlace:Mumbai PartnerDate:April20,2015 MembershipNumber:100052
INDEPENDENT AUDITORS’ REPORT
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281
WithreferencetotheAnnexurereferredtoinparagraph 10 ofthereportoftheAuditors’totheMembersofSTCICommoditiesLimitedontheaccountsfortheyearended31stMarch2015,wereportthat:
(i) Basedontheexamination,thecompanydoesnothaveanyfixedassetsandhenceclause(i)(a)and(b)oftheOrderisnotapplicabletotheCompany.
(ii) Accordingtotheinformationandexplanationgiventous,theCompanydoesnothaveanyinventoryandhenceclause(ii)(a),(b),(c)oftheOrderisnotapplicabletotheCompany.
(iii) As per the information furnished, the Company has not granted any loans, secured or unsecured,companies, firms or other parties covered in the register maintained under Section 189 of theCompaniesAct,2013.Henceclause(iii)(a)and(b)isnotapplicabletotheCompany.
(iv)Inouropinionandaccordingtoinformationandexplanationgiventousthereisanadequateinternalcontrolsystemcommensuratewiththesizeofthecompanyandthenatureofitsbusiness.Duringtheyearthereisnosaleofserviceandpurchaseoffixedassets.
(v)AccordingtotheinformationandexplanationgiventoustheCompanyhasnotacceptedanydepositswithinthedirectivesissuedbytheReserveBankofIndiaandtheprovisionsofsections73to76theAct.Henceclause(v)oftheOrderisnotapplicabletotheCompany.
(vi)Thecentralgovernmenthasnotprescribedmaintenanceofcostrecordsundersectionsubsection(1)ofsection148oftheCompaniesActforanyactivitiesofthecompany.Accordinglyclause(vi)totheorderisnotapplicable.
(vii) Accordingtotheinformationandexplanationgiventousandonthebasisofourexaminationofthebooksofaccount;
(a) the Company has been regular in depositing undisputed statutory dues with the appropriateauthorities.
(b) therearenostatutorydueswhichhavenotbeendepositedonaccountofanydispute,otherthanthefollowing:
Nature of dues
Period to which amount relates
Amount (`)
Forum where dispute is pending
IncomeTax F.Y2006-07(A.Y2007-08)
1,220,012
Outofthetotaldemandraisedfor`1,587,192,therefundstotheextentof̀ 1,10,068,̀ 1,28,354and `128,758forFY2008-09,FY2009-10andFY2011-12respectivelyhavebeenadjustedagainstoutstanding demand for AY 2007-08.(Disputepending with Assessing officer for rectificationofmistakeundersec154oftheIncometaxAct,1961).
ANNEXURE TO THE AUDITORS’ REPORT
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(c)TherewerenoamountsrequiredtobetransferredtotheinvestoreducationandprotectionfundinaccordancewiththerelevantprovisionsoftheCompaniesAct1956(1of1956)andtherulesmadethereunder.Henceclause(vii)(c)oftheorderisnotapplicabletotheCompany.
(viii)TheCompanyhasnotincurredcashlossduringthefinancialyear.However, the accumulated losses of the Company at the end of the year have exceeded fifty percent of its net worth.
(ix)AccordingtotherecordsoftheCompanyexaminedbyusandtheinformationandexplanationgiventous,theCompanyhasnotavailedanyloansfromfinancialinstitutionorbankorissuedanydebenturesduringtheyear.
(x)Inouropinionandaccordingtothe informationandexplanationsgiventousthecompanyhasnotgivenanyguaranteeforloanstakenbyothersfromabankorfinancialinstitutionduringtheyear.
(xi)TheCompanyhasnotobtainedanytermloans.
(xii) During the course of our examination of the books and records of the Company, carried out inaccordancewiththegenerallyacceptedauditingpracticesinIndia,andaccordingtotheinformationandexplanationsgiventous,wehaveneithercomeacrossanyinstanceoffraudonorbytheCompany,noticedorreportedduringtheyear,norhavewebeeninformedofanysuchcasebytheManagement.
For CNK & Associates LLP Chartered Accountants
FirmRegistrationNo:101961WFirmRegistrationNumber:101961W
Hiren Shah (Partner)
MembershipNo:100052
Place:MumbaiDate:April20,2015
ANNEXURE TO THE AUDITORS’ REPORT
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283
BALANCE SHEET AS AT MARCH 31, 2015(Amountin`)
Particulars Note No
As at March 31,
2015
As atMarch 31,
2014I EQUITY AND LIABILITIES
1 Shareholders’ funds
(a)Sharecapital 1.1 45,000,000 45,000,000
(b)Reservesandsurplus 1.2 (31,402,808) (32,066,975)
Sub-Total- (A) 13,597,192 12,933,025
2 Share Application Money Pending Allotment
- -
Sub-Total- (B) - - 3 Non-current liabilities
(a)Deferredtaxliabilities(Net) - -
(b)Otherlongtermliabilities - -
Sub-Total-(C) - -
4 Current liabilities
(a)Short-termborrowings - -
(b)Tradepayables 2.1 814,389 760,563
(c)Othercurrentliabilities 2.2 233,598 315,571
Sub-Total-(D) 1,047,987 1,076,134
TOTAL (A+B+C+D) 14,645,179 14,009,158
II ASSETS
5 Non-current assets
(a)Fixedassets
(i)Tangibleassets - -
(ii)Intangibleassets - -
(b)Othernon-currentassets 3 3,472,599 3,440,105
Sub-Total-(E) 3,472,599 3,440,105
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284
BALANCE SHEET AS AT MARCH 31, 2015(Amountin`)
Particulars Note No
As at March 31,
2015
As atMarch 31,
20146 Current assets
(a)Currentinvestments 4.1 620,419 262,164
(b)Cashandcashequivalents 4.2 10,019,874 9,629,617
(c)Othercurrentassets 4.3 532,287 677,272
Sub-Total-(F) 11,172,580 10,569,053
TOTAL (E+F) 14,645,179 14,009,158
NoteNo.1to14formanintegralpartofthisAccounts
For and on behalf of the Board As per our attached report of even date
For CNK & Associates LLPChartered AccountantsFirmRegnNo.:101961W
D S R Murthy Chairman
S. Venkateswarlu Director
P. Madhav Director
Hiren C. ShahPartnerMembershipNo.:100052
Place:MumbaiDate:April20,2015
Place:MumbaiDate:April20,2015
STCI COMMODITIES LIMITED
285
STATEMENT OF PROFIT AND LOSS FOR THE YEAR ENDED MARCH 31, 2015
ParticularsNote No
For the year ended
For the year ended
March 31, 2015
March 31, 2014
I Revenuefromoperations 5 - - II Otherincome 6 974,323 945,877
III Total revenue (I + II) 974,323 945,877
IV Expenses:Other expenses 7 243,966 752,896Depreciationandamortizationexpense - -
V Total Expenses 243,966 752,896
VI Earnings before tax (III-V) 730,357 192,982 VII Taxexpense:
Current tax - - Short/(Excess)provisionfortaxofearlieryear 66,190 - Deferredtaxliability/(asset) - -
VIII Profit /(Loss) for the period 664,167 192,982
IX Earnings per equity share of face value of ` 10(1)Basic 0.15 0.04(2)Diluted 0.15 0.04
NoteNo.1to14formanintegralpartofthisAccounts
(Amountin`)
For and on behalf of the Board As per our attached report of even date
For CNK & Associates LLPChartered AccountantsFirmRegnNo.:101961W
D S R Murthy Chairman
S. Venkateswarlu Director
P. Madhav Director
Hiren C. ShahPartnerMembershipNo.:100052
Place:MumbaiDate:April20,2015
Place:MumbaiDate:April20,2015
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286
Note No. 1.1: Share capital
NOTES ON ACCOUNTS FOR THE YEAR ENDED MARCH 31, 2015(Amountin`)
Particulars As at
March 31, 2015 As at
March 31,2014 Authorised5,000,000(PY:5,000,000)Equitysharesof` 10/-each 50,000,000 50,000,000Issued, Subscribed & Fully paid upEquityShareCapital4,500,000(PY:4,500,000)Equitysharesof`10/-eachfullypaid-up 45,000,000 45,000,000
TOTAL 45,000,000 45,000,000
Details of Shareholding as at March 31, 2015
i) STCICommoditiesLimitedisa100%whollyownedsubsidiarycompanyofSTCIFinanceLimited
ii) Shareholdersholdingmorethan5%ofEquityShares
Name of Shareholder As at March 31, 2015 As at March 31, 2014 No of
Shares% of
holdingNo of Shares % of
holding1.STCIFinanceLtd 4,470,000 99.34% 4,470,000 99.34%2.STCIFinanceLtdjointlywithShriRajivRanjan 5,000 0.11% 5,000 0.11%3.STCIFinanceLtdjointlywithShriKamleshRathi 5,000 0.11% 5,000 0.11%4.STCIFinanceLtdjointlywithMsSuparnaSharma 5,000 0.11% 5,000 0.11%5.STCIFinanceLtdjointlywithMsSabitaBragenza 5,000 0.11% 5,000 0.11%6.STCIFinanceLtdjointlywithShriAlokePrasad 5,000 0.11% 5,000 0.11%7.STCIFinanceLtdjointlywithShriDeepakPaharya 5,000 0.11% 5,000 0.11%
4,500,000 100.00% 4,500,000 100.00%STCI FINANCE LIMITED (PY: 4,500,000 No of shares, 100% holding)
iii) Reconciliationofnumberofequityshares(F.V.of` 10each)
Particulars As at March 31, 2015 As at March 31, 2014
No. of shares
Amount in ` No. of shares
Amount in `
Numberofsharesatthebeginningofyear 4,500,000 45,000,000 4,500,000 45,000,000
Add:SharesIssued - - - -
Less:Shareboughtback/forfeited - - - -
Numberofsharesattheendofyear 4,500,000 45,000,000 4,500,000 45,000,000
iv) Eachequityshareisentitledtoonevotingrightonly.
v) Therehasnotbeenanychangeinsharecapitalstructureofthecompanyeitherbywayof issueofsharesorbuybackofsharesduringthelastfiveyears.
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287
NOTE NO. 1.2: RESERVES & SURPLUS(Amountin`)
Particulars As at March 31, 2015
As at March 31, 2014
Surplus / (Deficit) at beginning of the year (32,066,975) (32,259,957)
Add:NetProfit/(Loss)forthecurrentyear 664,167 192,982
Surplus / (Deficit) at end of the year (31,402,808) (32,066,975)
NOTE NO. 2.1: TRADE PAYABLES(Amountin`)
Particulars As at March 31, 2015
As at March 31, 2014
Trade payables
-DuetoSmallandMicroEnterprises# - -
-OtherthanMicroandSmallEnteprises
i.toSubsidiaries - -
ii.toOthers 814,389 760,563
Total 814,389 760,563
#TherearenoduespayabletoMicro,SmallandMediumEnterprisesinviewofthenatureofthebusinessoftheCompany.TheCompanyhasnotreceivedanyintimationfromthesuppliersregardingstatusundertheMicro,SmallandMediumEnterprisesDevelopmentAct,2006(theAct).Inviewofthis,informationrequiredundersection22oftheMicro,SmallandMediumEnterprisesDevelopmentAct,2006(theAct)hasnotbeengiven.
NOTE NO. 2.2: OTHER CURRENT LIABILITIES(Amountin`)
Particulars As at March 31, 2015
As at March 31, 2014
Other Payables
Statutorydues 3,500 3,000
Others 230,098 312,571
Total 233,598 315,571
NOTES ON ACCOUNTS FOR THE YEAR ENDED MARCH 31, 2015
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288
NOTE NO. 3: OTHER NON-CURRENT ASSETS(Amountin`)
Particulars As at March 31, 2015
As at March 31, 2014
Interestaccruedbutnotdue - -
CashdepositwithCommoditiesExchanges1 2,505,581 2,505,581
TaxDeductedatSource/RefundDue 967,018 934,525
Total 3,472,599 3,440,105
1Cash Deposit with Commodities ExchangesTheCompanyhasplacedBaseCapitalinformofcashaswellasnoncashinformofFDRwithCommoditiesExchangesamountingto`4,005,581(PY:`4,005,581).Thedetailsofthesameareasunder:
(Amountin`)
Deposits with Exchanges Nature of Deposit As at March 31, 2015
As at March 31, 2014
NationalCommodityandDerivativeExchangeLtd. Base Capital- Cash 1,500,000 1,500,000
MultiCommodityExchange Base Capital- Cash 1,005,581 1,005,581
Total Base Capital in Cash 2,505,581 2,505,581
NationalCommodityandDerivativeExchangeLtd. Base Capital - FD 1,500,000 1,500,000
Base/Additional Capital in FDR (Non-Cash) 1,500,000 1,500,000
Total of Base Capital 4,005,581 4,005,581
NOTE NO. 4.1: CURRENT INVESTMENTS(Amountin`)
Particulars Face Value
Quantity (units)
As at March 31, 2015
As at March 31,2014
Other Investments (Non Trade) Quoted
Investment in Mutual fund units
LICNomuraMFSavingPlusFund-GrowthPlan(PYunits:14226.412)
` 10 6,534.606 120,419 262,164
LICSAVINGSPLUSFUND-DIRECTGROWTHPLAN(PYunits:Nil)
` 10 24,474.172 500,000 -
Total 620,419 262,164
Additional information
Aggregateamountofquotedinvestments 620,419 262,164
Market value of quoted investment 673,654 280,849 CurrentInvestmentsarevaluedatcostormarketvaluewhicheverislower.
NOTES ON ACCOUNTS FOR THE YEAR ENDED MARCH 31, 2015
STCI COMMODITIES LIMITED
289
NOTE NO. 4.2: CASH AND CASH EQUIVALENTS(Amountin`)
Particulars As at March 31, 2015
As at March 31, 2014
Cash and Cash Equivalents
Balances with Bank 290,415 228,572
Cash on hand 2,820 1,045
Other Bank Balances
-FixedDepositwithmaturityofmorethan3monthsbut lessthan12months2
9,726,639 9,400,000
-FixedDepositwithmaturityofmorethan12months2 - -
Total 10,019,874 9,629,617
2Outofthetotalfixeddepositsof`97,26,639.12,FixedDepositworthof`15,00,000hasbeenlienmarkedinfavourofNationalCommodityandDerivativeExchangeLtd.(NCDEX)asBaseCapital(PY:`94,00,000and`15,00,000/-asBaseCapital)andremainingfixeddepositof`29,25,536, `40,00,000and`13,01,103arecleanfixeddepositmaturingonJune7,2015,July12,2015,andDecember22,2015respectively(PY:CleanFixed Deposits `79,00,000).
NOTE NO. 4.3: OTHER CURRENT ASSETS(Amountin`)
Particulars As at March 31, 2015
As at March 31, 2014
Others
-InterestAccruedbutnotdue(onFixedDepositswithBanks) 532,287 677,272
Total 532,287 677,272
NOTE NO. 5: REVENUE FROM OPERATIONS ThecompanydoesnothaveanyrevenuefromoperationsduringtheperiodunderauditforthefinancialyearendedMarch31,2015nordidithaveinthepreviousyearendedMarch31,2014.Sincetheoperationsofthecompanyshavebeencompletelystalledfrom20thSeptember2011
NOTES ON ACCOUNTS FOR THE YEAR ENDED MARCH 31, 2015
STCI COMMODITIES LIMITED
290
NOTE NO. 6: OTHER INCOME (Amountin`)
Particulars As at March 31, 2015
As at March 31, 2014
InterestincomefromFDR 902,646 820,040
InterestonIncometaxrefund 8,421 -
OtherIncome 50,000 -
Netgainonsaleofcurrentinvestments 13,256 125,837
Total 974,323 945,877
NOTE NO. 7: OTHER EXPENSES (Amountin`)
Particulars As at March 31, 2015
As at March 31, 2014
Rates & Taxes 9,155 2,335
Travellingexpenses 8,533 16,008
VsatCharges - 24,920
Legal&Professionalcharges 85,298 348,600
PostageandCourier 245 389
Membership&Subscription - 150,000
Advertisement - 5,289
PaymenttoAuditors
- As Auditors 30,000 30,000
-Forotherservices 5,000 21,000
MiscellaneousExpenses 35,623 68,258
BankandDPCharges 10,112 26,097
Director'sSittingfees 60,000 60,000
Total 243,966 752,896
NOTE NO. 8:THE COMPANY AND THE NATURE OF ITS BUSINESS
ThecompanywasincorporatedonSeptember20,2004withtheobjectofcarryingonthebusinessoftradingandbrokingincommoditiesonthevariousCommodityExchangesieMultiCommodityExchange(MCX)andNationalCommodityandDerivativeExchange(NCDEX),Mumbai.
NOTES ON ACCOUNTS FOR THE YEAR ENDED MARCH 31, 2015
STCI COMMODITIES LIMITED
291
During the financial year 2011-12, The Company had decided to discontinue the commodity brokingoperations. Accordinglythebrokingoperationswerediscontinuedwitheffectfrom20thSeptember2011. Thecompanyhasalreadysettledalmostallitsclientsoutstandingaccountsandsomeoftheclientaccountsarependingduetolegalcaseswiththem.
Therefore, according to the Accounting Standard (AS) - 1 “Disclosure of Accounting Policies” and on thegroundsofprudenceandconsidering the requirementsofAccountingStandard, theaccountscontinue tohavenotbeenpreparedontheassumptionofgoingconcernbasissincethefinancialyear2011-12.
Further,thecompanyhassubmittedanapplicationwithCommoditiesExchangesa)NationalCommodity&DerivativesExchangeLimited(NCDEX)andb)MultiCommodityExchangeforsurrenderofmembershipon25/10/2013.
NOTE NO. 9 : SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
NOTE NO. 9.1 : ACCOUNTING CONVENTIONS
ThefinancialstatementshavebeenpreparedandpresentedunderaccrualbasisofaccountingandcomplywiththeapplicableAccountingStandardsundersection133oftheCompaniesAct2013readwithRule7oftheCompanies(Accounts)Rule,2014asamended.
NOTE NO. 9.2 : REVENUE RECOGNITIONS
i) Brokerageincomeisrecognizedontradedate.
ii) Dividendisaccountedonanaccrualbasiswhentherighttoreceivethedividendisestablished.
iii) InterestIncomeisrecognizedonaccrualbasis.
NOTE NO. 9.3 : INVESTMENTS
LongTerminvestmentsarevaluedatcostcomprisingofacquisitionandincidentalexpenseslesspermanentdiminutioninvalue,ifany.Provisionfordiminutioninthevalueoflongterminvestmentsismadetorecognizeadeclineotherthantemporaryinthevalueofinvestments.
Investmentsotherthanlong-terminvestmentsareclassifiedascurrentinvestmentsandvaluedatcostormarketvaluewhicheverislower.
NOTE NO. 9.4 : ACCOUNTING FOR TAXES ON INCOME
Deferredtaxontimingdifferencesbetweentaxableincomeandaccountingincomeisaccountedfor,usingthetaxratesandthetaxlawsenactedorsubstantiallyenactedasonthebalancesheetdate.Deferredtaxassetsotherthanonunabsorbedtaxlossesandprovisionfordoubtfuldebtsarerecognizedonlywhenthere
NOTES ON ACCOUNTS FOR THE YEAR ENDED MARCH 31, 2015
STCI COMMODITIES LIMITED
292
isareasonablecertaintyoftheirrealization.Deferredtaxassetsonunabsorbedtaxlossesandprovisionfordoubtfuldebtsarerecognizedwhenthereisvirtualcertaintyoftheirrealization.
NOTE NO. 9.5 : PROVISION AND CONTIGENCIES
TheCompanycreatesaprovisionwhenthereisapresentobligationasaresultofpasteventthatprobablyrequiresanoutflowofresourcesandareliableestimatecanbemadeoftheamountofobligation.Adisclosureofcontingentliabilityismadewhenthereisapossibleobligationorapresentobligationthatwillprobablynotrequireoutflowofresourcesorwhereareliableestimateoftheobligationcannotbemade.Contingentassetsareneitherrecognizednordisclosed.
NOTE NO. 10 : RELATED PARTY DISCLOSURE
A)ofParent/AssociateCompaniesasidentifiedbytheManagementareasunder:
Name of Related Party Nature of Relationship
1.STCIFinanceLimited HoldingCompany
2.STCIPrimaryDealerLtd FellowSubsidiary
B)TransactionwithHolding/GroupCompany(Amountin`)
Nature of Transaction Name of Related Party As at March 31, 2015
As at March 31, 2014
1.SittingFeesPaid STCIFinanceLimited 40,000 40,000
NOTE NO. 11 : EARNING PER SHARE
EarningspersharearecomputedinaccordancewithAS-20Earningspersharebydividingthenetprofitaftertaxbytheweightedaveragenumberofequitysharesoutstandingfortheperiod.
Earning Per Share - Basic and diluted(Amountin`)
Particulars As at March 31, 2015
As at March 31,2014
Profit/(Loss)aftertaxfortheyear 664,167 192,982
Weightedaveragenumberofequitysharesoutstandingduringtheyear
4,500,000 4,500,000
Nominalvalueperequityshare 10 10
EarningsPerShare–Basicanddiluted 0.15 0.04
NOTES ON ACCOUNTS FOR THE YEAR ENDED MARCH 31, 2015
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293
NOTE NO. 12 : SEGMENT REPORTING
Thecompanydoesnothaveanyreportablesegmentduringthefinancialyear2014-15astheoperationofthecompanyhasbeendiscontinuedduringthefinancialyear2011-12.However,TheCompanyhadonlyonesegmentiebrokingincommodityonvariouscommodityexchanges.
NOTE NO. 13 : CONTINGENT LIABILITIES
NoprovisionhasbeenmadeinrespectofdisputedmattersfromIncomeTaxAuthoritiestotheextentof`1,220,012(PY`1,348,770)fortheAY2007-08.Outofthetotaldemandraisedfor`1,587,192,therefundtotheextentof`1,10,068&`1,28,354and`1,28,758forFY2008-09,FY2009-10andFY2011-12respectivelyhasbeenadjustedagainstoutstandingdemandforAY2007-08.IncomeTaxmatterforthesamehasbeendisputedbytheCompanysinceitissubjecttoappeals/representations.
Note No. 14
PreviousYearfigureshavebeenregrouped/re-arrangedwherevernecessary.
NOTES ON ACCOUNTS FOR THE YEAR ENDED MARCH 31, 2015
For and on behalf of the Board As per our attached report of even date
For CNK & Associates LLPChartered AccountantsFirmRegnNo.:101961W
D S R Murthy Chairman
S. Venkateswarlu Director
P. Madhav Director
Hiren C. ShahPartnerMembershipNo.:100052
Place:MumbaiDate:April20,2015
Place:MumbaiDate:April20,2015
STCI COMMODITIES LIMITED
294
CASH FLOW STATEMENT FOR THE YEAR ENDED MARCH 31, 2015(Amountin`)
Particulars Year EndedMarch 31, 2015
Year EndedMarch 31, 2014
A. CASH FLOW FROM OPERATING ACTIVITIES
Net(Loss)/Profitbeforetaxandextraordinaryitems 730,357 192,982
Adjustmentsfor:
Noncash(incomes)/expenditures (8,421) -
InterestIncome (911,067) (820,040)
Loss/(Profit)onsaleofInvestments (13,256) (125,837)
(932,744) (945,877)
OperatingProfit/(loss)beforeworkingcapitalchanges (202,387) (752,896)
ChangesinWorkingCapital:
(Decrease)/IncreaseinTradePayable 53,826 112,476
(Decrease)/IncreaseinOtherCurrentLiabilities (81,970) 153,574
Decrease/(Increase)inothercurrentassets 144,985 (415,709)
Decrease/(Increase)inothernon-currentassets - 80,565
116,841 (69,094)
CASH FLOW FROM / (USED IN) OPERATING ACTIVITIES (85,546) (821,990)
Less:TaxesPaid (90,265) (82,004)
NET CASH FLOW FROM / (USED IN) OPERATING ACTIVITIES (175,811) (903,994)
B. CASH FLOW FROM INVESTING ACTIVITIES
(Purchase)/SaleofCurrentInvestments (358,256) 1,369,163
Profitonsaleofinvestment 13,256 125,837
InterestReceived 911,067 820,040
NET CASH FLOW FROM / (USED IN) INVESTING ACTIVITIES 566,067 2,315,040
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295
Particulars Year EndedMarch 31, 2015
Year EndedMarch 31, 2014
C. CASH FLOW FROM FINANCING ACTIVITIES
Repaymentofborrowings - -
NET CASH FLOW FROM / (USED IN) FINANCING ACTIVITIES 0 0
NET INCREASE / (DECREASE) IN CASH & CASH EQUIVALENTS (A+B+C) 390,256 1,411,047
Cash and Cash equivalents at beginning period 9,629,618 8,218,571
Cash and Cash equivalents at end of period (Refer note No 4.2) 10,019,874 9,629,618
CASH FLOW STATEMENT FOR THE YEAR ENDED MARCH 31, 2015
(Amountin`)
Preparedasper“IndirectMethod”asprescribedbyAccountingStandard-3(revised)“CashFlowStatements”
For and on behalf of the Board As per our attached report of even date
For CNK & Associates LLPChartered AccountantsFirmRegnNo.:101961W
D S R Murthy Chairman
S. Venkateswarlu Director
P. Madhav Director
Hiren C. ShahPartnerMembershipNo.:100052
Place:MumbaiDate:April20,2015
Place:MumbaiDate:April20,2015
STCI COMMODITIES LIMITED
296
Registered Office Address :A/B1, 802, A-Wing. 8th Floor, Marathon Innova, Marathon Nextgen Compound,
Off. Ganpatrao Kadam Marg, Lower Parel (West), Mumbai - 400 013.