Standalone Financial Statements of IIFL Holdings Limited Notes forming part of Standalone Financial Statements for the year ended March 31, 2016 NOTE 1. CORPORATE INFORMATION: IIFL Holdings Limited was incorporated on October 18, 1995 and is engaged in Merchant Banking and Investment Advisory services besides holding investments in subsidiaries. The Group business consist of finance, financial services, capital market services, distribution of financial products and wealth management services which are carried out by separate subsidiaries of IIFL Holdings Limited. NOTE 2. SIGNIFICANT ACCOUNTING POLICIES: 2.1 Basis of Accounting and Preparation of Financial Statements: The financial statements have been brpared in accordance with the Generally Accepted Accounting Principles in India (Indian GAAP) to comply with all material aspects of the applicable Accounting Standards notified under section 133 of Companies Act, 2013 (Act) read with Rule 7 of the Companies Accounts Rules, 2014 (as amended) and the relevant provisions of the Companies Act, 2013. The financial statements have been brpared on accrual basis under the historical cost convention. The accounting policies adopted in the brparation of the financial statements are consistent with those followed in the brvious year by the Company. 2.2 Use of Estimates: The brparation of financial statements in conformity with the generally accepted accounting principles which requires the management to make estimates and assumptions that affect the reported amount of assets and liabilities on the date of the financial statements and the reported amount of revenues and expenses during the reporting period. The management believes that the estimates used in the brparation of financial statements are prudent and reasonable. Difference between the actual result and estimates are recognized in the period in which the results are known / materialized. 2.3 Fixed Assets and Debrciation and Amortization: Fixed assets are stated at cost of acquisition less accumulated debrciation and impairment loss, if any, thereon. Debrciation is charged using the straight line method based on the useful life of fixed assets as estimated by the management as specified below. Debrciation is charged from the month in which new assets are put to use. No debrciation is charged for the month in which assets are sold. In the case of transfer of used fixed assets from group Companies, debrciation is charged over the remaining useful life of the assets. Individual assets / group of similar assets costing up to Rs. 5,000 has been debrciated in full in the year of purchase. Lease hold land is debrciated on a straight line basis over the lease hold period. 4 Translation of Foreign Currency Items: Foreign currency transactions are recorded at the exchange rates brvailing on the date of the transaction. Exchange difference, if any, arising out of transactions settled during the year are recognized in the statement of Profit and Loss. Foreign currency monetary assets and liabilities are translated at the exchange rate brvailing on the Balance Sheet date. The exchange gains or losses, if any, are recognized in the statement of Profit and Loss and related assets and liabilities are accordingly restated in the Balance Sheet. 2.5 Revenue Recognition: Revenue is recognized to the extent it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured. The following specific recognition criteria must also be met before revenue is recognized. (a) Income related to advisory activities, Investment banking, Merchant banking is accounted on accrual basis. (b) Dividend income is recognized when the right to receive payment is established. (c) Capital Gain/ Loss is recognized on the date of trade. (d) Interest Income is recognized on accrual basis. 2.6 Employee Benefits: The Company's contribution towards Provident Fund and Family Pension Fund, which are defined contribution, are accounted for on an accrual basis and recognised in the Statement of Profit & loss. The Company has provided "Compensated Absences" on the basis of actuarial valuation. Gratuity is post employment benefit and is in the nature of defined benefit plan. The Liability recognized in the Balance Sheet in respect of gratuity is the brsent value of defined benefit obligation at the Balance Sheet date together with the adjustments for unrecognized actuarial gain or losses and the past service costs. The defined benefit obligation is calculated at or near the Balance Sheet date by an independent actuary using the projected unit credit method. 2.7 Deferred Employee Stock Compensation: The stock options granted by the Company are accounted for as per the accounting treatment brscribed by SEBI (Employee Stock Option Scheme and Employee Stock Purchase) Guidelines, 1999 and the guidance note on Accounting for Stock Options issued by The Institute of Chartered Accountant of India, whereby the intrinsic value of the options are recognised as deferred employee compensation. The deferred employee compensation is charged to the Statement of Profit and Loss on a straight line basis over the vesting period of the options. The Employee Stock Options Outstanding Account, net of unamortised Deferred Employee Compensation is shown separately as part of Reserves and Surplus. 2.8 Provisions, Contingent Liabilities and Contingent Assets: The Company creates a provision when there is brsent obligation as a result of a past event that probably requires an outflow of resources and a reliable estimate can be made of the amount of the obligation. A disclosure for a contingent liability is made when there is a possible obligation or a brsent obligation that may, but probably will not, require an outflow of resources. When there is a possible obligation or a brsent obligation in respect of which the likelihood of outflow of resources is remote, no provision or disclosure is made. Provisions are reviewed at each Balance Sheet date and adjusted to reflect the current best estimate. If it is no longer probable that the outflow of resources would be required to settle the obligation, the provision is reversed. Contingent Assets are neither recognized nor disclosed in the financial statements. 2.9 Taxes on Income: Tax expense comprises current and deferred tax. Current income-tax is measured at the amount expected to be paid to the tax authorities in accordance with the Income-tax Act, 1961 enacted in India. Provision for current tax is computed based on estimated tax liability computed after adjusting for allowance, disallowance and exemptions in accordance with the applicable tax laws. Deferred income taxes reflect the impact of timing differences between taxable income and accounting income originating during the current year and reversal of timing differences for the earlier years. Deferred tax is measured using the tax rate and the tax laws enacted or substantively enacted at the Balance Sheet date. The deferred tax asset is recognised or unrecognised, to the extent that it has become reasonably certain or virtually certain, as the case may be, that sufficient future taxable income will be available. At each reporting date, the Company reassesses unrecognized deferred tax assets. Deferred tax liability is recognised as and when arisen. 2.10 Operating Leases: Lease rentals in respect of operating lease arrangements are charged to the Statement of Profit & loss in accordance with Accounting Standard 19 - Leases, issued by the Institute of Chartered Accountants of India. 2.11 Investments: Investments, which are readily realizable and intended to be held for not more than one year from the date on which such investments are made, are classified as current investments. All other Investments are classified as non - current investments. Current investments are stated at lower of cost or fair value. Non - current investments are carried at cost. Provision for diminution in value of non - current investments is made, if in the opinion of the management such diminution is other than temporary. For investment in mutual funds, the net assets value (NAV) declared by the mutual funds at the Balance Sheet date is considered as the fair value. 2.12 Inventories: Closing stock is valued at cost or market value whichever is lower. Cost is computed on FIFO basis. The comparison of cost and market value for arbitrage portfolio is done separately for each script. 2.13 Earnings Per Share: Basic earnings per share for equity shareholders have been calculated by dividing the Net Profit or loss after Tax by the weighted average number of equity shares outstanding during the period. The diluted earnings per share for equity shareholders have been computed by dividing the Net Profit or loss after Tax by the weighted average number of shares after giving dilutive effect of the outstanding stock options. 2.14 Preliminary Expenses are written off in same financial year in which they are incurred. NOTE: 2. In the opinion of the management, there is only one reportable business segment as envisaged by AS 17 'Segment Reporting. Accordingly, no separate disclosure for segment reporting is required to be made in the financial statements of the Company. Secondary segmentation based on geography has not been brsented as the Company operates primarily in India and the Company perceives that there is no significant difference in its risk and returns in operating from different geographic areas within India. NOTE: 3. CORPORATE SOCIAL RESPONSIBILITY During the financial year 2015-16, the Company spend Rs. 2.25 million (P.Y. Rs. 3.91 million) out of the total amount of Rs. 2.34 million (P.Y. Rs. 6.59 million) required to be spent as per section 135 of the Companies Act 2013 in respect of Corporate Social Responsibility (CSR). The Company was focused on implementing the projects identified by the CSR Committee and had successfully completed most of the projects. The Company had substantially utilised the amount required to be spent on CSR projects and there is a small amount of Rs. 0.09 million remain as unspent. The Company has many ongoing projects and plans to further increase the spend in the year to come through its impact driven projects. NOTE 4. No Interest has been paid/is payable by company during the year to "Suppliers" referred under the Small and Medium Enterprises Development Act, 2006. The aforementioned is based on the response received by the Company to its inquiries with suppliers with regards to applicability under the said act. NOTE 5. Previous year figures have been regrouped, reclassified & rearranged, wherever considered necessary to confirm to current year's brsentation. As per our attached report of even date For Sharp & Tannan Associates Chartered Accountants Firm's Registration No. 109983W By the hand of Tirtharaj Khot Partner Membership No (F) 037457 For and on behalf of the Board of Directors Nirmal Jain Chairman (DIN: 00010535) Prabodh Agrawal Chief Financial Officer R.Venkataraman Managing Director (DIN: 00011919) Gajendra Thakur Company Secretary Place : Mumbai Dated: May 05, 2016 |