20th ANNUAL REPORT 2011 -2012 - Bombay Stock Exchange...FY06 to Rs.183,839 crore in FY11, an...
Transcript of 20th ANNUAL REPORT 2011 -2012 - Bombay Stock Exchange...FY06 to Rs.183,839 crore in FY11, an...
20thANNUAL REPORT
2011 -2012
CITI PORT FINANCIAL SERVICES LIMITED
56
1
Index Page
1. Notice 03
2. Directors Reports 05
3. Management & Discuss Analysis 07
3. ComplianceCertificate 09
4. Corporate Governance 13
6. Auditors Reports 26
7. Balance Sheets 30
8. Profit&LossAccount 31
9. CashFlowStatements 32
10. Notes 33
11. Attendance Slip/Proxy Slip 52
2
BOARD OF DIRECTORS
Smt Madhavi Musnuru -- Executive DirectorSri Ratan Kishan Musurnur -- DirectorSri Miriyalad Ethirajan -- Director Sri Parthasarathi Prattipati -- Director Sri Anil Kumar Talasila -- Director STATUTORY AUDITORS
M/s. G.V. & Co., LISTED AT:CharteredAccountants BSELimited#2,159,StreetNo-3, MadrasStockExchangeLimited VaniNagar,Malkajigiri,Hyderabad-47 TheDelhiStockExchangeAssociationLimited SECRETARIAL CONSULTANTS M/s P S RAO & ASSOCIATESCompany SecretariesFlatNo.10,4thFloor,IswaryaNilayam,DwarakapuriColony AUDIT COMMITTEEPunjagutta,Hyderabad-500082 Sri Parthasarathi PrattipatiREGISTERED OFFICE Sri Anil Kumar Talasila Smt. Madhavi MusnuruHouseNo.8-3-678/42/5, 1stFloor,SantoshManor, REMUNERATION COMMITTEENavodaya Colony, Yellareddyguda, Sri Sri Parthasarathi PrattipatiHyderabad-500073. SriAnilKumarTalasila Sri Miriyalad EthirajanSHARE TRANSFER AGENTS M/s. Bigshare Services Private Limited SHAREHOLDER GRIEVANCE COMMITTEEFlatNo.:306,Rightwing,3rdFloor,AmruthaVilleApts., SriParthasarathiPrattipatiOpp:YashodhaHospital, SriAnilKumarTalasilaSomajiguda,RajbhavanRoad, SriMiriyaladEthirajanHyderabad-500082
3
NOTICE
Notice is hereby given that the 20thAnnualGeneral Meeting of the Members of theCompany will be held at the RegisteredOffice of the Company at House No.8-3-678/42/5,1stFloor,SantoshManor,NavodayaColony,Yellareddyguda,Hyderabad-500073.onSATURDAY 29th SEPTEMBER, 2012 at 2.00 P.M totransactthefollowingbusiness:
ORDINARY BUSINESS:
1. To receive, consider, approve and adopt the Audited Balance Sheet of the Company as at 31stMarch,2012andtheStatementProfitandLossfortheyearendedonthatdateandtheReport of Directors’ and the Auditors thereon.
2. To appoint a Director in place of Sri. Parthasarathi Prattipati who retires byrotation,beingeligibleoffershimselfforre-appointment.
3. To appoint a Director in place of Smt Madhavi Musunuruwho retires by rotation, beingeligibleoffershimselfforre-appointment.
4. To appoint Statutory Auditors of the Company toholdofficefromconclusionofthisAnnualGeneral Meeting till the conclusion of the next Annual General Meeting on such remuneration asmay be decided by theBoard.
By order of the Board ForCITIPORTFINANCIALSERVICESLIMITED
sd/- Madhavi Musnuru DirectorPlace:HyderabadDate:09.08.2012
NOTES:
1. Amemberentitled to attend and vote at the meeting is entitled to appoint a proxy to attend and vote at the meeting instead of himself / herself and the proxy neednotbeamemberoftheCompany.ProxiesinordertobeeffectivemustbereceivedattheRegisteredOfficeoftheCompanynot less than48hrsbeforethe commencement of the meeting.
2. TheRegister ofmembers and sharetransfer books of Company shallremain closed from TUESDAY, 25th SEPTEMBER, 2012 TO SATURDAY, 29th SEPTEMBER, 2012 (bothdaysinclusive).
3. Members are requested to notifyany change in their addresses to the Company immediately.
4. Members desirous of obtaining anyinformation on the Annual Accounts of theCompanyarerequestedtowritetotheCompanyatleast7workingdaysbeforethedateofthemeetingtoenablethe Company for compilation of the requiredinformation.
5. Members are requested to notifyimmediately any change of address to their Depository Participants (DPs) in respect of their holdings in electronic form and also in respect of their physical share folios, if any to FlatNo.306,RightWing, 3rdfloor,AmruthaVilleApt.,Opp.YashodhaHospital,RajBhavanRoad,Somajiguda, Hyderabad-500082
4
ADDITIONAL INFORMATION ON THE DIRECTORS SEEKING RE-APPOINTMENT ON RETIRING BY ROTATION AT THE ENSUING ANNUAL GENEAL MEETING:
SRI PARTHASARATHI PRATTIPATI
Sri Parthasarathi Prattipati is a Non Executive Independent Director of the Company since 10th January, 2009.HeisaB.ComgraduateandholdstheCAIIBqualification.HeisaretiredBankerandpresentlyheisfinancialadvisortovariouscompanies.HehasworkedfortheUCOBankfor27years.Heisneitherchairmanandmemberofanycommitteeofanyothercompany.
ShareholdingintheCompany:100
SMT MADHAVI MUSNURU
SmtMadhaviMusunuruaged31yearsisaExecutiveDirectoroftheCompanyqualifiedasPGDBM(HR&Finance)MPA(MasterinProfessionalAccounting)Shehasexperienceofmorethan3yearsasAccountingProfessionalandCorporateFinance.
5
DIRECTOR’S REPORTToTheMembers,
Your Directors have pleasure in presenting the 20thAnnualReporttogetherwiththeAuditedAccounts of the Company for the year ended 31st March 2012.
FINANCIAL RESULTS:(RsInLakhs)
NetSales/incomefromoperation 16.88 19.08TOTAL INCOME 16.88 19.08TOTAL EXPENDITURE 12.01 12.62Profit/(Loss)beforedepreciation&FinancialCharges 4.70 6.46Depreciation 0.04 0.17FinancialCharges 0.63 0.02Profit Before Tax 4.20 6.27Prior period items -- --Provisionfortax 1.46 1.96DeferredTax 0.01 (0.09)NET PROFIT / (LOSS) 2.73 4.39
The overall performance of the Company of the FY2011-2012wassatisfactoryascompared tothelastfinancialyear.CompanyhasrecordednetprofitofRs2.73LakhsascomparedtoNetprofitRs4.39Lakhs.
DIVIDEND:
During thefinancial yearunder reviewYourCompanyhasrecordedaNominalprofit;henceyour Directors do not recommend any dividend fortheFinancialYear2011-12.
FIXED DEPOSITS
TheCompanyhasneitheracceptednorrenewedanydeposits fallingwithin theprovisionsof
Section58AoftheCompaniesAct,1956readwiththe Companies (Acceptance of Deposits) Rules, 1975fromthepublicduringtheFinancialYear.
DIRECTORS
Sri P.Prattipati and Smt Madhavi Musunuru DirectorsofyourCompanyretiresbyrotationattheensuingAnnualGeneralMeetingandbeingeligible,offersthemselvesforreappointment.
DIRECTORS’ RESPONSIBILITY STATEMENT:
TheDirectorsofyourCompanyherebyreport:
(i) that in the preparation of Annual Accounts fortheFinancialYearended31stMarch,2012,theapplicableaccountingstandardshave been followed along with theproper explanation relating to material departures,ifany,therefrom;
(ii) that the Directors have selected such accounting policies and applied them consistently and made judgments and estimatesthatarereasonableandprudentsoastogiveatrueandfairviewofthestateof affairs of the Company at the end of the FinancialYearended31stMarch,2012andoftheprofitandlossoftheCompanyforthatperiod;
(iii) thattheDirectorshavetakenproperandsufficient care for the maintenance of adequateaccountingrecordsinaccordancewith the provisions of this Act forsafeguarding the assets of the Company and for preventing and detecting fraud andotherirregularities;
(iv) that the Directors have prepared the annualaccountsonagoingconcernbasis.
PARTICULARS OF EMPLOYEES:
Therearenoemployeesdrawingremunerationexceeding the limits as specified under the provisions of Section 217 (2A) of the Companies Act,1956,readwith the Companies (Particulars ofEmployees)Rules,1975.
FortheYear ended 31.03.2011
For the Year ended31.03.2012
6
AUDITORS:
M/s. G.V. &Co., Chartered Accountant, Statutory Auditor of the Company retire at the ensuing Annual General Meeting and the company has receivedanotice inwriting fromMr.GrandhiVittal Chartered Accountant that in the event of appointment as Statutory Auditor at the ensuing Annual General Meeting, such appointment willbe inaccordancewith the limits specifiedinsection224(1B)oftheCompaniesAct,1956.
C O N S E R VA T I O N O F E N E R G Y , TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO:
The Company is under the business ofinvestmentandfinancingso theparticularsofthe Conservation of energy and Technology AbsorptionisNIL
ForeignExchangeEarningsandOutgo:NIL
MANAGEMENT DISCUSSION & ANALYSIS
Pursuanttotheprovisionofclause49ofthelistingagreement a report on Management Discussion & Analysis is set out as an ANNEXURE- A
COMPLIANCE CERTIFICATE
Your Company has obtained the necessaryComplianceCertificate as required in termsof Section 383A readwith the Companies(Compliance Certificate) Rules 2001 of the CompaniesAct, 1956 for the financial year2011-2012 from M/s P S Rao & Associates Practicing Company Secretary same is given in ANNEXURE--B
CORPORATE GOVERNANCE:
TheCompanyhasbeenmakingeveryendeavorto bringmore transparency in the conduct ofbusiness.As per the requirements of ListingAgreements with the Stock Exchanges, acompliance report on corporate Governance fortheyear2011-2012andacertificatefromtheAuditors of the Company are furnished as a part of this Annual Report ANNEXURE--C
LISTING FEE:
Your Company’s shares are presently listed on theBSELimited,TheDelhiAssociationLimitedandMadrasStockExchangeLimited.Companyis regular inpaying the listing fee to theStockExchanges.
ACKNOWLEDGEMENTS:
Your Directors place on record their appreciation and gratitude for the continuous support and assistance extended by all the StatutoryAuthorities. The Board also extends its heartfelt gratitude to the Creditors and Shareholders for theconfidencereposedbythemintheCompany.Your Directors also place on record their sincere appreciation for the continued contributionsmadebytheemployees at all levels.
Date: 09-08-2012Place: Hyderabad
By order of the BoardForCITIPORTFINANCIALSERVICESLIMITED
Sd/- Sd/- MADHAVI MUSNURU PARTHASARATHI PRATTIPATI Director Director
7
MANAGEMENT DISCUSSION & ANALYSISANNEXURE- A
NBFC & GROWTH
The Indian economy has beenwitnessing highratesofgrowthinthelastfewyears.Financingrequirements have also risen commensuratelyandwillcontinuetoincreaseinordertosupportandsustainthetremendouseconomicgrowth.
NBFCshavebeenplayingacomplementaryroletotheotherfinancialinstitutionsincludingbanksin meeting the funding needs of the economy. They help fill the gaps in the availability offinancial services that otherwise occur in bank-dominated financial systems. The gaps arein regards the product as well customer andgeographical segments.
NBFCsover theyearshaveplayedaveryvitalrole in the economy. They have been at theforefront of catering to the financial needs andcreating livelihood sources of the so-called un bankable masses in the rural and semi-urbanareas. Through strong linkage at the grassrootslevel, they have created a medium of reach and communication and are very effectively serving this segment. Thus, NBFCs have all the keycharacteristics to enable the government andregulator to achieve the mission of financialinclusion in the given time.
ThenumberofNBFCshasdecreasedfrom13,014inFY06to12,409inFY11howeverthesectorhasgrownby2.6timesbetweenFY06andFY11ataCAGR of 21%. It accounted for 10.8% in terms of outstanding advances and 13% in terms of assets of the banking system in FY06. This share hasrisen to13.2%and13.78%respectively inFY11.IntermsofdepositstheshareofpublicdepositsheldbyNBFCsas compared todepositbaseofbankshasdecreasedfrom1.05%inFY06to0.22%inFY11.
PublicdepositsheldbyNBFCshave shownafallingtrend,decreasingbyapproximately48%inthelast5years,whileownedfunds(reserves& surplus and capital deployed) have gone up by195%.Theoutstandingadvanceshavegrownapproximately 3 times in the last 5 years to reachRs.536,074croresinFY11.BanksexposuretoNBFCshasincreasedfromRs.62,308croreinFY06toRs.183,839croreinFY11,anincreaseofapproximately 3 times growing at aCAGRof24% during the period FY06-FY11 and a 37%increaseoverFY10.
OVERVIEW OF NBFC
NBFCs have registered impressive growth inthepastdecade.Theyprovidevaluableserviceto many productive sectors of the economy for asset creation and also in conversion of physical assets to financial assets (eg: gold loans). Alarge part of the growth can be attributed toprudential normsbrought inby the regulator.However,thelargenumberofNBFCscarryingon diverse businesses poses regulatorychallengegiventheirgrowingsize.Regulationshavetobesuitedtodiverseaspectsofvariousbusinesses and strengthened to increase thetrust and transparency in the sector.
TheGroupisofafirmopinionthattheregisteredNBFCs - both deposit taking and non-deposittaking,playavitalroleintheeconomy.Thereis,however,astrongperceptionthattheremaybein the countrya largenumberofunregisteredand thereforeunregulatedNBFCs inurban aswellasruralgeographies,which isdifficult tobeestimated.TheRBI’sReporton“TrendsandProgress inBanking in India’of 2005-06givesan indication pointing out that the RBI received 38,244applications forgrantofcertificationasanNBFC.
Therefore, the unregistered entities could bemanifold the number of registered NBFCs.Further, a total of 575 NBFCs (both deposit
8
and non-deposit taking) accounted for 80%of the totalassetsof theNBFCsector inFY10.In addition, the Residuary Non-bankingCompanies9(RNBCs)accountfor66%ofpublicdeposits held by the NBFC sector. Therefore,the Group underlines that the regulatory and supervision mechanism for the NBFC sectorneedtobewidenedandstrengthened.
RISK FACTORS OF ECONOMIC
The fiscal deficit of the Central Governmenthasremainedelevatedsince2008-09.Thefiscalslippagein2011-12wasalsosignificantlyhigh.Even though the Union Budget envisages areductioninthefiscaldeficitin2012-13,severalupside risks to the budgeted fiscal deficitremain. In particular, containment of non-plan expenditure within the budget estimates for2012-13 is contingent upon the Government’s abilitytoadheretoitscommitmentofcappingsubsidies.Goingby the recentburden-sharingarrangementswiththeoilmarketingcompanies(OMCs), thebudget estimateof compensationfor under-recoveries of OMCs at the present level of international crude prices is likely tofallsignificantlyshortof therequiredamount.Any slippage in the fiscal deficit will haveimplicationsforinflation.
Further,thelargefiscaldeficitalsohasledtolargeborrowing requirements by the Government.Thebudgetednetmarketborrowings throughdatedsecuritiesfor2012-13at`4.8trillionwereevenhigher than theexpandedborrowingsof`4.4trillionlastyear.Suchlargeborrowingshavethepotentialtocrowdoutcredittotheprivatesector. Crowding out of the more productiveprivatecreditdemandwillbecomemorecriticalifthereisfiscalslippage.
ForthequarterendedDecember2011,theCADwasveryhighat4.3percentofGDP.Thislevelis unsustainable and needs to be contained.Withglobalcapitalflowstoemergingmarketsprojectedatlowerlevelsin2012,financingoftheCADwillcontinuetoposeamajorchallenge.Inflationinprotein-baseditemscontinuestobeindoubledigitswithlittlesignoftrendreversal.Thisismainlybecauseofstructuralimbalancesin such commodities. The Government has announced some supply-side measures to redressprotein-inflationinthemediumtolongterm.Inthenearfuture,however,thepressureonpricesofprotein-richitemswillcontinuetobeariskfactorforfoodinflation.
FUTURE OUTLOOK:
TheBoardofDirector’sarelookingforvariousnew investment plans for the Company.KeepinginviewtheupsanddownsinthestockMarketsintherecentpast
9
ANNEXURE-BFORM
(See Rule 3)
COMPLIANCE CERTIFICATE
CIN:L65991AP1992PLC065867AuthorizedCapital :Rs.3,20,00,000/-Paid-upCapital :Rs.3,10,00,000/- ToTheMembers,M/s. CITIPORT FINANCIAL SERVICES LIMITEDHouseNo.8-3-678/42/5,1stFloor,Santosh Manor, Navodaya Colony, Yellareddyguda,Hyderabad-500073
Wehaveexaminedtheregisters,records,booksandpapers of M/s.CITIPORTFINANCIALSERVICES LIMITED (The Company) asrequiredtobemaintainedundertheCompaniesAct, 1956, (theAct) and theRulesmade thereunder and also the provisions contained in the Memorandum and Articles of Association of theCompanyfortheFinancialYearended31stMarch,2012.Inouropinionandtothebestofourinformation and according to the examinations carriedoutbyusandexplanationsfurnishedtousby thecompany,and itsofficers,wecertifythat in respect of the aforesaid financial yearthat: 1. TheCompanyhaskept andmaintained
all registers as stated in Annexure A to thiscertificate,aspertheprovisionsoftheAct and the rules made there under and allentriesthereinhavebeenrecorded.
2. The Company has filed the forms andreturns as stated in Annexure B to this certificate, with the Registrar ofCompanies.
3. The company being a public limitedcompanycommentsarenotrequired.
4. The Board of Directors duly met four times on 30.05.2011, 13.08.2011, 12.11.2011 and14.02.2012inrespectofwhichpropernoticeswere given and theproceedingswere duly recorded and signed inthe Minutes Book maintained for thepurpose.
5. The company has closed its Register of Members,duringthefinancialyearunderreview from Monday 19th September,2011 to Thursday 22nd September, 2011(both day inclusive) for the purpose of19thAnnualGeneralMeeting.
6. The19thAnnualGeneralMeetingoftheCompany for the financial year ended31st March, 2011 was held on 22ndSeptember, 2011 after giving due noticetothemembersofthecompanyandtheresolutions passed thereat were dulyrecordedintheMinutesBookmaintainedfor the purpose.
7. NoExtra-ordinaryGeneralMeetingwasheld during the financial year underreview.
8. The Company has not advanced loans to itsDirectorsand/orthepersonsorfirmsor companies referred to under Section 295oftheActduringyearunderreview.
9. The Company has not entered into anycontracts falling within the purview ofSection297oftheActduringthefinancialyearunderreview.
10. The Company has made necessary entries in the register maintained under Section 301 of the Act.
11. TherewerenoinstancesfallingwithinthepurviewofSection314oftheActduring
10
the financial year under review and assuchcompanywasnotrequiredtoobtainany approval from the Board of Directors, membersortheCentralGovernment.
12. The Company has not issued any duplicate sharecertificatesduringthefinancialyearunderreview.
13. The Company has
i) not made any allotment/ transmission of Securities during the financialyear.
ii) delivered all the certificates on
Transfer of shares in accordance withtheprovisionsoftheAct
iii) not deposited any amount in a separate Bank Account as nodividend was declared during thefinancialyearunderreview.
iv) noamounts lyingwith it inunpaiddividend account or any application money due for refund, matured deposits, matured debentures andthe interest accrued thereon whichhave remained unclaimed or unpaid for a period of seven years or more.
v) complied with requirements ofSection217oftheActforthefinancialyearunderreview.
14. The Board of Directors is duly constituted duringthefinancialyearunderreviewandthefollowingchangestookplace:
o Sri Minjur Doraisamy Ethirajan and
Sri Ratan Kishan Musurnuru, the retiring directors were reappointedas directors by themembers in theAnnual General Meeting
There were no other instancesof appointment of directors, additional directors, alternate directorsanddirectorstofillcasualvacancies during the financialyear.
15. The Company has not appointed/ re-
appointed any Managing Director/ whole– timedirector/Managerduringthefinancialyear.
16. The Company has not appointed any sole-selling agents during the financialyearunderreview.
17. There were no instances requiring theCompany to obtain approval from theCentral Government, Company LawBoard, Regional Director, Registrar or such other authorities as may beprescribedunderthevariousprovisionsoftheActduringthefinancialyearunderreview.
18. The Directors have disclosed their interest in other firms/Companies to the Boardof Directors pursuant to the provisions of the Act and the rules made there under duringthefinancialyear.
19. The Company has not allotted anyshares/debentures/other securitiesduringthefinancialyearunderreview.
20. TheCompanyhasnot boughtback anysharesduringthefinancialyear.
21. Therewas no redemption of PreferenceShares/Debenturesduringthefinancialyear under review as the company hasnot issued any preference shares or debentures.
11
22. Therewerenotransactionsnecessitatingthe Company to keep in abeyance therights to dividend, rights shares and bonus shares pending registration oftransfer of shares.
23. The Company has not invited any deposits falling within the purview ofSection 58A during the financial yearunderreview.
24. The company has not borrowed anyamounts from its Directors, members,public, financial institutions, banks andothers during the financial year underreview.
25. The provisions of Section 372A of the Act are not applicable as the principlebusiness of the Company is acquisitionofshares,stocksorothersecurities.
26. The Company has not altered the provisions of the memorandum withrespect to situation of the company’s registered during the financial yearunderreview.
27. The Company has not altered the provisions of the memorandum withrespect to the objects of the companyduringthefinancialyearunderreview.
28. The Company has not altered the provisions of the memorandum withrespect to name of the Company duringthefinancialyearunderreview.
29. The Company has not altered theprovisions of the memorandum withrespect to share capital during the financialyearunderreview.
30. The Company has not altered its Articles of Association during the financialyearunderreview.
31. As per the information given by theofficersoftheCompany,therewerenoprosecutionsinitiatedagainstorshowcausenoticesreceivedbythecompanyduring the financial year for offencesunder the Act.
32. The company has not received any money as security from its employees duringthefinancialyear.
33. The Company has not constitutes a separate provident fund trust for its employees or class of its employees as contemplated under Section 418 of the Act.
for P S Rao & Associates Company Secretaries
Sd/- CS Vanitha Company Secretary
C.P.No:10573DATE:09-08-2012PLACE:Hyderabad
12
DATE:09-08-2012PLACE:Hyderabad
ANNEXURE - A STATUTORY REGISTERS AS MAINTAINED BY THE COMPANY
1.RegisterofDirectors’U/s3032.RegisterofDirectors’ShareholdingsU/s3073.RegisterofMembersU/s1504.MinutesofBoardMeetingsU/s1935.MinutesofAnnualandExtra-OrdinaryGeneralMeetingsU/s1936.Registerofcontracts,firmsandCompaniesinwhichDirectorsareinterestedU/s301.7.RegisterofInvestmentU/s372A
ANNEXURE – BFormsandReturnsasfiledbytheCompanywiththeRegistrarofCompanies,duringthefinancialyear ending on 31st March, 2012
Sl.No Forms/ Section Purpose Remarks Returns
1 FormNo.32 256 AppointmentofsmtMadhaviMusnuruas Filedwithnormalfeeson Director 12/10/2011
2 FormNo.66 383A SubmissionofCompliancecertificate Filedwithnormalfeeson 21.10.2011
3 FormNo. 209 BalanceSheet&Profit&LossA/cforthe FiledwithAdditionalfees 23AC&ACA financialyearending31/03/2011 on17/11/2011
4 Form20B 159 FilingofAnnualreturnforfinancialyear Filedwithnormalfees ended 31/03/2011 on17.11.2011
for P S Rao & Associates Company Secretaries
Sd/- CS Vanitha Company Secretary C.P.No:10573
13
CORPORATE GOVERNANCE REPORT(Incompliancewithclause49ofthelistingagreemententeredwiththestockexchanges)
1. COMPANY’S PHILOSOPHY ON CODE OF CORPORATE GOVERNANCE: Your company believes in providing highest transparency and ethical value in Corporate
Governance. Your company also believes in taking into confidence all the stakeholders viz.Shareholders, Employees, Creditors, Customers etc.Your company is committed to take thetorchofCorporateGovernanceforward,sothateverystakeholderofthecompanysynchronizesandsynergiestheireffortsintheirgrowthalongwiththegrowthoftheircompany.
2. BOARD OF DIRECTORS:
• CompositionofBoardofDirectors
Atpresent,thestrengthoftheBoardisFiveDirectors.TheBoardcomprisesof1Executive,1NonExecutive Not Independent Director and 3 Non-Executive and Independent Directors.
• Boardmeetingandattendance
Four BoardMeetings were held during the Financial Year and the gap between two boardmeetings did not exceed four months.
Thedatesonwhichmeetingwereheldareasfollows:
30.5.2011 13.08.2011 12.11.2011 14.02.2012
TheconstitutionoftheBoardisgivenbelow:
S. Director Category Attendance Attendance Other Boards No at AGM held in Board on Meeting 22.09.2011 He Atte Direct Comm Committee ld nded orship ittee member Chairman ship ship 1 Smt Madhavi Musnuru Executive Director Yes 4 4 1 Nil Nil 2 Sri Ratan Kishan Musurnur Non Executive Not Independent Director Yes 4 4 1 Nil Nil
3 Sri Miriyalad Ethirajan Non Executive & Independent Director Yes 4 4 1 Nil Nil
4 Sri Parthasarathi Prattipati Non Executive & Independent Director Yes 4 4 6 Nil Nil
5 Sri Anil Kumar Talasila Non Executive & Independent Director Yes 4 4 4 Nil Nil
14
3. AUDIT COMMITTEE:
G Brief description of terms of reference
• Reviewtheun-auditedquarterlyresults,halfyearlyandannualaccountsofthecompany
• OverseetheCompany’sfinancialreportingprocessandthedisclosureofitsfinancialinformationtoensurethatthefinancialstatementiscorrect,sufficientandcredible.
• RecommendingtheappointmentandremovalofStatutory auditors,fixationofaudit feeandalso approval for payment of any other services
• Reviewingwiththemanagement,theannualfinancialstatementsbeforesubmissiontotheBoardfocusingprimarilyon:
(i) Any changes in accounting policies and practices
(ii)Majoraccountingentriesbasedonexerciseofjudgmentbymanagement
(iii)Qualificationsindraftauditreports
(iv)Significantadjustmentsarisingoutoftheaudit
(v) The going concern assumption
(vi)Compliancewithaccountingstandards
• Anyrelatedpartytransactionsi.e.transactionsofthecompanyofmaterialnature,withpromotersorthemanagement,theirsubsidiariesorrelativeetc.;thatmayhavepotentialconflictwiththeinterests of the company at large
• Reviewingwithmanagement,externalandinternalauditor’s,theadequacyofinternalcontrolsystems
• Reviewingtheadequacyofinternalauditfunction,includingthestructureoftheinternalauditdepartment, staffing and seniority of the official heading thedepartment, reporting structurecoverageandfrequencyofinternalaudit
• Discussionwithinternalauditorsanysignificantfindingsandfollow-upthereon.
• Reviewingthefindingsofanyinternalinvestigationsbytheinternalauditorsintomatterswherethere is suspected of fraud or irregularity or a failure of internal control systems of a material natureandreportingthemattertotheboard
• Discussionwithexternalauditorsbeforetheauditcommences,onthenatureandscopeofauditaswellashavepost-auditdiscussiontoascertainanyareasofconcern
15
• Reviewingthecompany’sfinancialandriskmanagementpolicies
• Tolookintoandreviewthereasonsforsubstantialdefaults,ifany,inpaymentstothedepositors,debentureholders,shareholders(incaseofnon-paymentofdeclareddividends)andcreditors;
TheChairmanoftheAuditCommitteeshallbepresentattheAnnualGeneralMeetingoftheCompanytoprovideanyclarificationonqueriesfromshareholders.
G Composition
TheAuditCommitteeoftheCompanycompriseofthefollowingDirectors:
Name of the Director Designation
Sri Parthasarathi Prattipati ChairmanSriAnilKumarTalasila MemberSmt.MadhaviMusnuru Member
G Meetings and Attendance during the Financial Year:
MEETINGS:
TheAuditcommitteeoftheBoardmetfourtimesduringtheyear,themeetingswasheldforapprovalofUn-AuditedFinancialResultsandAuditedFinancialresultsoftheCompanyi.e.on: 30.05.2011 13.08.2011 12.11.2011 14.02.2012
ATTENDENCE:
Name NoofMeetingsHeld NoofMeetingsAttended
Sri Parthasarathi Prattipati 4 4
Sri Anil Kumar Talasila 4 4
Smt Madhavi Musnuru 4 4
Theun-auditedfinancialresultsforeachquarterareapprovedbytheAuditCommitteebeforepassedon to the Board of Directors for approval and adoption.
16
4. REMUNERATION COMMITTEE:
G Terms of Reference:
• TheRemunerationCommitteerecommendstotheboardthecompensationtermsoftheexecutive directors / non-executive directors
• FramingandimplementingonbehalfoftheBoardandonbehalfoftheshareholders,acredibleandtransparentpolicyonremunerationofexecutivedirectorsincludingESOP,Pension Rights and any compensation payment
• ConsideringapprovingandrecommendingtotheBoardthechangesindesignationandincrease in salary of the executive directors
• Ensuringtheremunerationpolicyisgoodenoughtoattract,retainandmotivatedirectors
• BringingaboutobjectivityindeemingtheremunerationpackagewhilestrikingabalancebetweentheinterestofourCompanyandtheshareholders.
G Composition
RemunerationCommitteeoftheCompanyconsistsoffollowingNon-ExecutiveDirectors,whichisasfollows:
NAME OF THE DIRECTOR DESIGNATION
Sri Parthasarathi Prattipati Chairman
SriAnilKumarTalasila Member
Sri Miriyalad Ethirajan Member
G Remuneration paid to Directors during the Financial Year
RemunerationforFinancialYear Name of Director Designation 2011-12 (in Rs.) Salary&Perks Total
SmtMadhaviMusnuru Director(Finance) 300000 300000
17
5. INVESTORS AND SHAREHOLDERS GRIEVANCE COMMITTEE:
G Briefdescriptionoftermsofreference:
To supervise andensure:(i) Efficienttransferofshares;includingreviewofcasesforrefusaloftransfer/transmissionof
sharesanddebentures;
(ii) Redressalofshareholderandinvestorcomplaintsliketransferofshares,non-receiptofbalancesheet,non-receiptofdeclareddividendsetc;
(iii) Issueofduplicate/split/consolidatedsharecertificates;
(iv) Allotmentandlistingofshares;
(v) Reviewofcasesforrefusaloftransfer/transmissionofsharesanddebentures;
(vi) Referencetostatutoryandregulatoryauthoritiesregardinginvestorgrievances;
(vii) Andtootherwiseensureproperandtimelyattendanceandredressalofinvestorqueriesandgrievances.
G Composition
TheCommitteecomprisesofthefollowingmembers:
NAME OF THE DIRECTOR DESIGNATION
Sri Parthasarathi Prattipati Chairman
SriAnilKumarTalasila Member
SriMiriyaladEthirajan Member
Name & Designation of the Compliance Officer : Smt Madhavi Musnuru Director
No. of shareholderscomplaintsreceivedduringtheFinancialYear : NilNo.ofcomplaintssolvedtothesatisfactionoftheshareholders : NilNo. of pendingcomplaints : Nil
18
6. LOCATION AND TIME WHERE THE LAST THREE AGM’S HELD:
Year Date Location Time
2010-11 22-09-2012 8-3-678/42/5,1stFloor,SantoshManor, 2.00 P.M. Navodaya Colony, Yellareddyguda, Hyderabad-500073
2009-10 16-09-2010 8-3-678/42/5,1stFloor,SantoshManor, 11.00A.M. Navodaya Colony, Yellareddyguda, Hyderabad-500073 2008-09 19-09-2009 41A,VivekNagar,Ambathur, 11.00A.M. Chennai-53 No Special Resolution is passed in the Previous three Annual General Meeting
POSTAL BALLOT:
No special Resolution is passed through Postal Ballot during the last Financial Year under Review
No Special Resolution is proposed to be conducted through postal ballot at the ensuing Annual General Meeting.
7. DISCLOSURES:
a. Materiallysignificantrelatedpartytransactionsi.e.transactionsoftheCompanyofmaterialnature,withitspromoters,theDirectorsorthemanagement,theirsubsidiariesorrelativesetc.,thatmayhavepotentialconflictwiththeinterestsofCompanyatlarge. – NIL –
b. Detailsonnon-compliancebytheCompany,penaltiesandstricturesimposedontheCompanybyStockExchangeorSEBIoranystatutoryauthority,onanymatterrelatedtocapitalmarkets,duringthelastthreeyears.: - NIL -
8. MEANS OF COMMUNICATION:
• TheQuarterly resultsareusuallypublished in theBusinessStandard (inEnglish)andAndhrabhoomi (inregional language) dailies.
Website : www.citiport.in
9. SHAREHOLDER INFORMATION:
• AGM:The20thAnnualGeneralMeetingoftheCompanywillbeheldonSaturday,29thSeptember,2012attheRegisteredOfficeoftheCompany
• Financial Year: April to March
19
CALENDER OF EVENTS:
Event DatesFirstQuarterun-audited(Provisional)FinancialResults SecondWeekofAugust,2012SecondQuarterun-audited(Provisional)FinancialResults SecondWeekofNovember,2012ThirdQuarterun-audited(Provisional)FinancialResults SecondWeekofFebruary,2013FourthQuarterAuditedFinancialResults LastWeekofMay,2013
• BOOK CLOSURE DATE:
• Book Closure Date: FROM TUESDAY, 25th SEPTEMBER, 2012 TO SATURDAY, 29th SEPTEMBER, 2012 (bothdaysinclusive).
• Listing on Stock Exchanges: The shares of the Company are listed at BSELimited MadrasStockExchangeLimited
TheDelhiStockExchangeAssociationLimited
ThecompanyhaspaidthelistingfeestotheaboveStockExchanges
• DividendPaymentDate: NA
• StockExchangeCode: BSELimited 531235 MadrasStockExchangeLimited CITIPORFIN theDelhiStockExchangeAssociationLimited 03193• DematISINNumber
UndertheDepositorySystemtheInternationalSecurities IdentificationNumber(ISIN)allottedtotheCompany’s INE494D01011 EquitySharesbyNSDL&CDSL
• Share Transfer System:
AllthephysicalsharetransfersreceivedareprocessedbytheShareTransferAgentsM/s.BigsharesServicesPrivate Limited Hyderabad. The Company’s shares are being traded in compulsory Demat form. TheCompanyhasenteredintoagreementwithbothNSDLandCDSLtodematerializeitsshares,whichenabletheCompany’ssharestobetransferredelectronicallythroughDepositoriesSystem.
20
• Market Price Data: DuringthenFinancialYear2011-12
Month BSE Limited
High Low
(Rs.) (Rs.)
April, 2011 14.05 13.00May, 2011 13.00 13.00June, 2011 15.04 13.65July, 2011 18.85 15.80August, 2011 18.65 16.05September,2011 16.75 16.00October,2011 15.90 14.50November,2011 15.00 12.90December,2011 -- --January, 2012 12.35 11.05February,2012 11.75 9.05March,2012 10.45 9.55
• Registrar and Transfer Agents : M/s. Bigshare Services Private Limited FlatNo.306,RightWing,3rdfloor,
AmruthaVilleApt.,Opp.YashodhaHospital, Raj Bhavan Road,Somajiguda, Hyderabad-500082
21
• SHAREHOLDING PATTERN AS ON 31ST MARCH 2012:
Sl No Category No. of Shares Held % of Shareholding
SHAREHOLDING OF PROMOTERS & PROMOTER GROUPA1. INDIAN Individuals/HinduUndividedFamily - - Central Government /State Government(s) - - BodiesCorporate 899304 29.01 FinancialInstitutions/Banks Sub Total of A1 899304 29.01A2. FOREIGN Individuals (Non-Residents) - - Bodies Corporate - - Institutions - - Any Other (Specify) - - Sub Total of A2 - - TOTAL SHAREHOLDING OF PROMOTER 899304 29.01 AND PROMOTER GROUP ( A1 +A2)B.1 Public Shareholdings Institutions - - MutualFundsandUTI - - Banks/FinancialInstitutions - - Central Government/State Government - - VentureCapitalFunds - - Insurance Companies - - ForeignInstitutionInvestor - - ForeignVentureCapitalInvestors - - Any Other (Specify) - - Sub Total B1 - -
B2. Non Institutions Bodies Corporate 627826 20.25 Individuals Individuals share holders holdings nominal sharecapitaluptoRs.1Lakhs 315917 10.19
Individual Shareholding holding nominal sharecapitalinexcessofRs.1Lakhs 1256941 40.55
Any Other (Specify) NRIs/OCBs 12 - ForeignCollaborators - - HUF - -
Sub Total B2 22,00,696 70.99
TOTAL OF PUBLIC SHAREHOLDING (B1+B2) 22,00,696 70.99
C SharesheldbyCustodianandagainstwhich - - DepositoryReceiptshavebeenissued
TOTAL A+B+C 3100000 100.00
22
DISTRIBUTION OF SHAREHOLDING AS ON 31.03.2012
Sl. No. Category From - To No. of % of No. of % of
Holders Holders Shares Shares
1 Upto-5000 601 91.48 2,43,356 7.85
2 5001-10000 12 1.82 89,799 2.90
3 10001-20000 13 1.98 1,78,541 5.76
4 20001 - 30000 8 1.22 2,34,400 7.57
5 30001-40000 10 1.52 3,04,000 9.80
6 40001-50000 4 0.61 1,98,400 6.40
7 50001-100000 5 0.76 4,02,400 12.98
8 100001andabove 4 0.61 14,49,104 46.74
TOTAL 657 100.00 31,00,000 100.00
• DEMATERIALIZATION OF SHARES AND LIQUIDITY: Since the Company has already entered into agreement with both the depositories, viz., NSDL and CDSL for dematerialization of its shares,the shareholdersare free todematerialize their sharesandkeep them indematerialized fromwithanyDepository Participant.
• OutstandingGDRs/ADRs/WarrantsoranyConvertibleinstruments,conversiondateandlikelyimpactonequity:Not Issued
• ADDRESS FOR CORRESPONDENCE : Madhavi Musnuru HouseNo.8-3-678/42/5, 1stFloor,SantoshManor, Navodaya Colony, Yellareddyguda,
Hyderabad-500073
CEO & CFO CERTIFICATION : The Executive Director of the Company gave annual certificatesonfinancialreportingandinternalcontrols
totheboardIntermsofclause49.
23
DECLARATION BY DIRECTOR ON COMPLIANCE WITH CODE OF CONDUCT AND ETHICS
CITIPORTFINANCIALSERVICESLIMITEDhasadoptedCodeofBusinessConductandEthics(“thecode”)whichappliedtoalltheemployeesandDirectoroftheCompany.UndertheCode,itisresponsibilityofallemployeesandDirectorstofamiliarizethemselveswiththeCodeandcomplywithitsStandards.
I hereby certify that the Board members and senior management personnel of CITIPORTFINANCIALSERVICESLIMITEDhaveaffirmedcompliancewiththeCodefortheFinancialYear2011-2012.
By order of the Board ForCITIPORTFINANCIALSERVICESLIMITED
Sd/-Place:Hyderabad MADHAVI MUSNURUDate:09-08-2012 Director
24
Chief Executive Officer (CEO) and Chief Financial Officer (CFO) Certificates:
I,MadhaviMusnuru,ExecutiveDirectorandCFOofM/sCitiportFinancialServicesLimitedtothebestofourknowledgeandbelief,certifythat:
1. IhavereviewedtheBalanceSheetandProfitandLossAccountandallitsschedulesandnotesonaccountsaswellastheCashFlowStatementfortheyearended31.03.2012
2. Tothebestofourknowledgeandbelief:
a) These statements do not contain any untrue statement or omit any material fact or contain statementsthatmightbemisleading.
b) ThefinancialstatementsandotherfinancialinformationincludedinthisreportpresentatrueandfairviewoftheCompany’saffairsandareincompliancewithexistingaccountingstandardsandapplicablelawsandregulations.
3. Tothebestofourknowledgeandbelief,therearenotransactionsenteredintobytheCompanyduringtheyearwhicharefraudulent,illegalorviolativeoftheCompany’scodeofconduct.
4. Iacceptresponsibilityforestablishingandmaintaininginternalcontrolsforfinancialreporting.We have evaluated the effectiveness of internal control systems of the Company pertaining to financialreportingandhavedisclosedtotheAuditorsandtheAuditCommittee,deficienciesinthedesignoroperationofsuchinternalcontrols,ifany,ofwhichweareawareandstepstakenorproposedtobetakenforrectifyingthesedeficiencies.
5. a) Therehasnotbeenanysignificantchangeininternalcontroloverfinancialreportingdur-
ingtheyearunderreference;
b) Therehasnotbeenanysignificantchangesinaccountingpoliciesduringtheyearunderreference;and
c) Wearenotawareofanyinstancesduringtheyearofsignificantfraud,withinvolvementthereinofthemanagementoranyemployeehavingasignificantroleintheCompany’sinternalcontrolsystemoverfinancialreporting.
Sd/-Place:Hyderabad MadhaviMusnuruDate:09.08.2012 Director
25
AUDITORS’ CERTIFICATE ON CORPORATE GOVERNANCE
To The Board of DirectorsCitiportFinancialServicesLimitedHyderabad
I have examined the compliance of the conditions ofCorporateGovernance byCiti Port FinancialServices Limited for the year ended onMarch 31, 2012, as stipulated in Clause 49 of the ListingAgreementofthesaidcompanywiththestockexchanges.
ThecomplianceoftheconditionsofCorporateGovernanceistheresponsibilityoftheManagement.Myexamination,conductedinthemannerdescribedintheguidancenoteon‘CertificationofCorporateGovernance’issuedbytheInstituteofCharteredAccountantsofIndiawaslimitedtoproceduresandimplementationsthereof,adoptedbytheCompanyforensuringthecomplianceoftheconditionsofCorporateGovernance.Itisneitheranauditnoranexpressionofopiniononthefinancialstatementsof the Company.
Inmyopinionandtothebestofmyinformationandaccordingtotheexplanationsgiventome,andtherepresentationsmadebytheDirectorsandtheManagement,IcertifythattheCompanyhascompliedwiththeconditionsofCorporateGovernanceasstipulatedintheabove-mentionedListingAgreement.
IfurtherstatethatsuchcomplianceisneitheranassuranceastothefutureviabilityoftheCompanynortheefficiencyoreffectivenesswithwhichtheManagementhasconductedtheaffairsoftheCompany.
ForGV&Co., Chartered Accountants
Sd/- Grandhi Vittal Proprietor MembershipNo.206462 FirmRegn.No.012875SPlace:HyderabadDate:09.08.2012
26
AUDITOR’S REPORTTo THEMEMBERS,CITIPORTFINANCIALSERVICESLIMITEDHYDERABAD
1. We have audited the attached Balance Sheet ofM/s.CitiPortFinancialServicesLimitedasat31stMarch,2012, theProfitandLossaccountandthecashflowstatementofthecompany for the year ended on that date annexedthereto.Thesefinancialstatementsare the responsibility of the company’smanagement.Myresponsibilityistoexpressan opinion on these financial statements basedonmyaudit.
2. I conductedmyaudit in accordancewithauditing standards generally accepted in India.Those standards require that Iplanandperformtheaudittoobtainreasonableassurance about whether the financialstatements are free of material misstatement. An audit includes examining, on a test basis,evidencesupportingtheamountsanddisclosures in thefinancial statements.Anaudit also includes assessing the accounting principles used and significant estimates madebymanagements,aswellasevaluatingtheoverallfinancialstatementpresentation.Ibelievethatmyauditprovidesareasonablebasisformyopinion.
3. As requiredby theCompanies (AuditorsReport)Order, 2003, issuedby the centralGovernment of India in terms of section 227(4A)oftheCompaniesAct,1956,Igivein the annexure, a statement on the matters specifiedinparagraphs4ofthesaidOrder.
4. Further tomy comments in the annexurereferredtoinPara3above,Ireportthat:
(a) I haveobtained all the informationand explanation,which to the best
ormyknowledgeandbeliefwerenecessary for the purpose of my auditinmyopinion,properbooksofaccountsasrequiredbylawhavebeenkeptbythecompanysofarasappears from my examination of suchbooks.
(b) The balance sheet, profit& lossaccount and cashflowstatementdealtwith by this report are inagreementwiththebookofaccount.
(c) Inmyopinion, thebalance sheet,profit &, loss account and cash flowstatementdealtwithby thisreportcomplywiththeaccountingstandardsreferredtoinsub-section(3c) of section 211 of the Companies Act,1956.
(d) On the basis of the writtenrepresentation received from the directors as on 31st March 2012 and takenon recordbyboardofdirectors, I report that none of the directorsisdisqualifiedason31stMarch,2012frombeingappointedas a director in terms of clause (g) of sub section (1) of section 274of the companies act, 1956.Asregards government - nominee directors, they are exempted from the provision of section 274 (1) (g) inviewofgeneralcircular issuedby the department of companyaffairs.
5. Inmy opinion and to the best ofmyinformation and according to the explanation given to me, the said accounts readwithsignificantaccountingpoliciesand the other note thereon, give the information requiredby the companiesact,1956, in themanner so requiredand
27
givea trueand fairview in conformitywiththeaccountingprinciplesgenerallyacceptedinIndia:
i. incaseofthebalancesheetofthestate of affairs of the company as at 31stMarch,2012;
ii. incaseofprofit&lossaccountofthe loss for the year ended on that date, and
iii. incaseofcashflowstatement,ofthecashflowsfortheyearendedon that date.
For G.V & Co.,CHARTEREDACCOUNTANTS
Sd/-Grandhi VittalProprietor.MembershipNo.206462FirmRegn.No.012875S
Place:HYDERABADDate:30.05.2012
28
ANNEXURE TO THE AUDITOR’S REPORT (Referred to in Paragraph 3 of our Report of even date)
I. InrespectofitsFixedAssets
a. The Company has maintained proper records showing full particularsincluding quantitative details andsituationoffixedassets.
b. All the fixed assets have beenphysicallyverifiedbythemanagementat the reasonable interval.Accordingto the information and explanations given to us, no material discrepancies werenoticedonsuchverification.
c. In our opinion and according to information and explanations given to us, the Company has not disposed off substantialpartoffixedassetsduringthe year.
II. The Company is a financial servicescompany, therefore physical verificationand maintenance of adequate recordof inventory is not applicable to thecompany.
III. a. The company has granted unsecured loans, to companies, firms andother parties covered in the register maintained under section 301 of the Act.
b. In our opinion and according tothe information and explanations given to us, the rate of interest, whenever applicable and other termsand conditions of the unsecured loans given by the company are notprimafacie, prejudicial to the interest of the company.
IV. In my opinion and according to the information and explanation given to me,
there are no laid down internal controlprocedures commensurate with the sizeofthecompanyandnatureofitsbusiness.
V. In our opinion and according to the information and explanations given to us, we are of the opinion, that thetransactionthatneedtobeenteredintheregister maintained under section 301 of the companies act, 1956 have been soenteredandtheyhavebeenmadeatpricewhicharereasonablehavingregardtotheprevailing market price at the relevanttime.
VI. In my opinion and according to the information and explanations given to us, the company has not accepted deposits frompublicandtherefore,theprovisionofSection 58A and 58AA of the Companies Act, 1956 and rules there under are notapplicabletothecompany.
VII. In my opinion, there is an internal audit system commensurate with the size ofbusiness.
VIII. The Central Government has not prescribedmaintenanceofcostrecordsbytheCompanyundersection209(1) (d)ofthe Act.
IX. The company has been regular indepositing undisputed statutory dues, including provident fund, investor education and protection fund, employees’ state insurance, income-tax, sales-tax,wealth-tax, customduty,exciseduty, cess andother statutorydueswiththe appropriate authorities. According to the information and explanation given to me, no undisputed amounts payable inrespect of income tax, wealth tax, salestax, customs duty and excise duty wereoutstanding, at the year-end for a period of more than six months from the date theybecamepayable.
29
X. The Company have accumulated losses at the end of the year of Rs.Nil and the company has not incurred cash losses during current year and the company wasn’t incurred any cash losses in theimmediatelyprecedingfinancialyear.
XI. Based on my audit procedures and on the information and explanation given bythemanagement, Iamoftheopinionthat the company has not defaulted in the repayment of dues to financialinstitutions,banksanddebentureholders.
XII. According to the information and explanations given to me, the company hasgivenloansandadvancesonthebasisofsecuritybywayofPronotes,postdatedinstruments,pledgeofshares,debenturesand other securities.
XIII. The provisions of any special statute applicabletoChitFund,NidhiorMutualBenefitFund/Societiesarenotapplicableto the Company.
XIV. In my opinion the company is not dealing ortradinginshares,securities,debenturesand other investments during the year under review; however there are long-term investments in the company. The records,however,doesnot fully complywith the provisions of clause 4(xiv) ofthe Companies (Auditor’s Report) Order, 2003applicabletothecompany.
XV. According to the information and explanations given to me, the company has not given any guarantee for loans taken by others from bank or financialinstitutions.
XVI. Therewerenotermloansobtainedbythecompany during the year.
XVII. Accordingtothecashflowstatementandother records examined by me and theinformation and explanations given to me,onoverallbasis,fundsraisedonshorttermbasishave,primafacie,notbeenusedduring the year for long term investment and vice versa, other than temporary deployment pending application.
XVIII. The company has not made any preferential allotment during the year nor does the company have any outstanding debenturesduringtheyear.
XIX. The company has not issued any debenturesandnosecuritiesandchargesarerequiredtobecreated.
XX. The company has not raised any money bypublicissueduringtheyear.
XXI. To the best of my knowledge andbelief and according to the informationexplanation given to me, no fraud on or bythecompanywasnoticedorreportedduring the year.
For G.V & Co.,CHARTEREDACCOUNTANTS
Sd/-Grandhi VittalProprietor.MembershipNo.206462FirmRegn.No.012875S
Place:HyderabadDate:30.05.2012
30
A Equity and Liabilities: Shareholders funds (a) God Account 22.00 22.00 (b) ShareCapital 1 31000000.00 31000000.00 (c)ReservesandSurplus 2 2918999.04 2647640.98 (d) Money Received against Share Warrants - - Share application money pending allotment - - Non-current liabilities (a)Long-termborrowings - - (b)Deferredtaxliabilities(Net) - - (c)OtherLongtermliabilities - - (d)Long-termprovisions - - Current Liabilities (a)Short-termborrowings - - (b)Tradepayables - - (c)Othercurrentliabilities 3 143923.00 130701.00 (d) Short-termprovisions 4 205489.00 196493.00 TOTAL 34268433.04 33974856.98 B Assets: Non-current assets (a) Fixedassets (i)Tangibleassets 5 50374.91 54286.03 (ii)Intangibleassets - - (iii)Capitalwork-in-progress - - (iv)Intangibleassetsunderdevelopment - - (b)Non-currentInvestments 6 2107137.62 2314057.02 (c) Deferredtaxassets(net) 18 2290.00 3290.00 (d)Long-termloansandadvances 7 22430221.00 20669467.00 (e) Other non-current assets 8 145738.00 145738.00 Current assets (a) Current Investments - - (b)Inventories - - (c) TradeReceivable - - (d)CashandBankbalances 9 761472.51 907695.93 (e) Short-termloansandadvances 10 8602357.00 9693538.00 (f) Other current assets 11 168842.00 186785.00 TOTAL 34268433.04 33974856.98 Accounting Policies & Other relevant Notes 16 to 30 PreviousYearFigureshavebeenregrouped/reclassified/rearrangedwherevernecessary.
Particulars Note As At As At No. 31.03.2012 31.03.2011
BALANCE SHEET AS ON 31ST MARCH, 2012
As per the report of even date attachedFor G.V & Co.,Chartered Accountants Sd/-(Grandhi Vittal)ProprietorMembershipNo.206462FirmRegnNo.:012875SPlace:HyderabadDate:30-05-2012
For and on behalf of the Board
Sd/- Sd/- MADHAVI MUSNURU PARTHASARATHI PRATTIPATI Whole time Director Director
Amount in INR.
31
A Continuing Operations: 1 Revenuefromoperations 12 1688373.00 1908097.00 Total Revenue 1688373.00 1908097.002 Expenses: (a)EmployeeBenefitExepense 13 682704.00 597848.00 (b)OtherExpenses 14 518958.00 663992.00 Total 1201662.00 1261840.003 Earnings before exceptional and extra ordinary items, interest, tax, depreciation and amortisation (EBITDA) (2-3) 486711.00 646257.004 FinanceCosts 15 63783.32 2084.685 Depreciationandamortisationexpense 5 3911.63 17074.976 Other Income - - 7 Profit / (Loss) before exceptional and
extraordinary items and tax (3-4-5+6) 419016.06 627097.358 Exceptional Items - - 9 Profit / (Loss) before extraordinary items and tax (7-8) 419016.06 627097.3510 Extraordinary items - - 11 Profit / (Loss) before tax (9-10) 419016.06 627097.3512 Tax Expense: -CurrentTax 146658.00 196493.00 -DeferredTax 1000.00 (9200.00)13 Profit / (Loss) for the period from continuing operations (11-12) 271358.06 439804.35B Discontinuing Operations 14 Profit/(loss)fromdiscontinuingoperations - -15 Tax expense of discontinuing operations - - 16 Profit/(Loss) from Discontinuing operations (after tax) (14-15) - - C Total Operations 17 Profit / (Loss) for the year (13+16) 271358.06 439804.3518 Earningsperequityshare: -Basic 0.09 0.14 -Diluted 0.09 0.14 Accounting Policies & Other relevant Notes 16 to 30 PreviousYearFigureshavebeenregrouped/reclassified/rearrangedwherevernecessary.
S. Particulars Note Year ended Year endedNo. No 31.03.2012 31.03.2011
STATEMENT PROFIT AND LOSS FOR THE YEAR ENDED 31ST MARCH, 2012
As per the report of even date attachedFor G.V & Co.,Chartered Accountants Sd/-(Grandhi Vittal)ProprietorMembershipNo.206462FirmRegnNo.:012875S
Place:HyderabadDate:30-05-2012
For and on behalf of the Board
Sd/- Sd/- MADHAVI MUSNURU PARTHASARATHI PRATTIPATI Whole time Director Director
Amount in INR
32
CASH FLOW STATEMENT FOR THE YEAR ENDED 31ST MARCH, 2012(Pursuanttoclause32ofListingAgreementasamended)
Particulars Year ended Year ended 31.03.2012 31.03.2011A. Cash flow from Operating activities NetProfitbeforetaxasperProfitandlossaccount 419016.06 627097.35Adjustments (Profit)/Lossonsaleofinvestments(net) - - Depreciation and Amortisation Expense 3911.63 17074.97 Preliminary Expenditure Written Off - - Interest Income - - Dividend income - - FinanceCosts 63783.32 2084.68 486711.00 646257.00 (Increase)/DecreaseinTradeandOtherReceivables - - (Increase)/DecreaseinTradePayables - - (Increase)/DecreaseinOtherCurrentLiab./ShortTermProv. (124440.00) (153750.00) (Increase)/DecreaseinOtherLongTermLiab./LongTermProv. - - Cash generated from Operations 362271.00 492507.00 Direct Taxes paid (10900.00) (149050.00)Net Cash from Operating activities 351371.00 343457.00 B. Cash flow from Investing Activities (Purchase)/SaleofFixedAssets(Net) - - CapitalWork-in-progress - - (Purchase) / Sale of Investments (Net) 206919.40 - (Profit)/Lossonsaleofinvestments - - MovementinLoans&Advances (669573.00) (394991.00) Changes in Other Current Assets / Non current Assets 28842.50 48798.00 Interest Income - - Dividend income - - Cashflowbeforeexceptionalitems (433811.10) (346193.00) Exceptional Items Net Cash from Investment Activities (433811.10) (346193.00)C. Cash Flow from Financing Activities Proceeds from issue of Share Capital/ Share Application Money - - Proceeds/(Repayment)fromBorrowings - - FinanceCosts (63783.32) (2084.68) Dividends Paid - - Dividend tax paid - - Effect of Exchange Rate change - - Netcashusedinfinancingactivities (63783.32) (2084.68)Net (Decrease) / Increase in cash and cash equivalents (146223.42) (4820.68)Cash and cash equivalents at the beginning of the year 907695.93 912516.61 Cash and Cash equivalents at the end of the year 761472.51 907695.931.TheaboveCashFlowStatementhasbeenpreparedundertheIndirectMethodassetoutinAccountingStandard3onCashFlowStatementsnotifiedundersection211(3C)oftheCompaniesAct,1956. 2.PreviousYearFigureshavebeenregrouped/reclassified/rearrangedwherevernecessary.
As per the report of even date attachedFor G.V & Co.,Chartered Accountants Sd/-(Grandhi Vittal)ProprietorMembershipNo.206462FirmRegnNo.:012875S
For and on behalf of the Board
Sd/- Sd/-
MADHAVI MUSNURU P. PARTHASARATHI WHOLETIMEDIRECTOR DIRECTOR
Amount in INR
Place:HyderabadDate:30-05-2012
33
Note No. 1 : SHARE CAPITAL
Sl Particulars As At 31.03.2012 As At 31.03.2011 No. Number Amount Number Amount
Authorised 1 EquitySharesofRs.10/-eachwith 3200000 32000000.00 3200000 32000000.00 Voting Rights
Issued, Subscribed and Paid up 1 EquitySharesofRs.10/-eachfullypaidup 3100000 31000000.00 3100000 31000000.00 withVotingRights
Total 3100000 31000000.00 3100000 31000000.00
(a) Reconciliation of the number of shares outstanding as at 31.03.2012 and 31.03.2011 Sl Particulars As At 31.03.2012 As At 31.03.2011 No. Number Amount Number Amount1 EquitySharesoutstandingatthe 3100000 31000000.00 3100000 31000000.00 beginningoftheyear
2 EquitySharesIssuedduringtheyear 0 0.00 0 0.00
3 EquitySharesboughtbackduringtheyear 0 0.00 0 0.00
4 EquitySharesoutstanding 3100000 31000000 3100000 31000000 at the end of the year
(b) Details of Shareholders holding more than 5 percent shares:
Sl Particulars As At 31.03.2012 As At 31.03.2011 No. No of % of No of % of Shares Held Holding Shares Held Holding
Equity Shares with Voting Rights 1 GinzaCommunicationPrivateLimited 307600 9.92% 307600 9.92%2 MithulInvestmentPrivateLimited 242200 7.81% 242200 7.81%
(c) Aggregate number and class of shares allotted as fully paid up for consideration otherthan cash, bonus shares and shares bought back for the period of 5 years immediately preceding the Balance Sheet date
S.No. Particulars No. of shares As At 31.03.2012 As At 31.03.2011
Nil Nil
NOTES FORMING PART OF FINANCIAL STATEMENTS AS AT 31.03.2012 Amount in INR
34
NOTES FORMING PART OF FINANCIAL STATEMENTS AS AT 31.03.2012 Note Particulars As at 31.03.2012 As at 31.03.211No Rs.
2 Note : Reserves & Surplus General Reserve AsperlastBalanceSheet 18913.32 18913.32 Add:TransferredfromProfit&LossA/c 0.00 0.00 Closing Balance 18913.32 18913.32 Statutory Reserve Fund * OpeningBalance 874952.48 786991.61 (+)Additionduringtheyear 54271.61 87960.87 Closing Balance 929224.09 874952.48 *StatutoryReserveFundCreatedasperSection45-IC ofReserveBankofIndiaAct,1934 Profit and Loss Account AsperlastBalanceSheet 1753775.18 1401931.70 (+)NetProfitforthecurrentyear 271358.06 439804.35 (+) Transfer from Reserves 0.00 0.00 (-)NetLossforthecurrentyear 0.00 0.00 (-) Proposed Dividends 0.00 0.00 (-) Interim Dividends 0.00 0.00 (-)TransfertoStatutoryReserve 54271.61 87960.87 Closing Balance 1970861.62 1753775.18 Total 2918999.04 2647640.98 3 Note : Other Current Liabilities TDSPayable 5052.00 8452.00 ExpensesPayable 138871.00 122249.00
143923.00 130701.00 4 Note : Short Term Provisions ProvisionsforIncometax 146658.00 196493.00 Provision for Standard Assets 58831.00 0.00 205489.00 196493.00
Amount in INR
35
Particulars
Rate(%)of
AsAt
Add
itions
Deletion
sAsAt
Upto
Forthe
Deletion
sTotalUpto
AsAt
AsAt
De
prec
iation
01
.04.20
11
durin
g the
du
ring t
he 3
1.03.2
012
01.04
.2011
Ye
ar
31
.03.20
12
31.03
.2012
31.0
3.201
1
year
ye
ar(i)
Tang
ible
Asse
ts
Furnitu
reandF
ixtures
6.33
277268.80
0.0
00.0
0277268.80
267677.14
0.0
00.0
0267677.14
9591.66
9591.66
Co
mpu
ter *
16.21
18
8130
.00
0.00
0.00
1881
30.00
18
1630
.00
0.00
0.00
1816
30.00
65
00.00
65
00.00
Typewr
iter
4.75
8750.00
0.0
00.0
08750.00
6328.63
415.6
30.0
06744.26
2006.25
2421.37
Airco
nditioner
4.75
43800.0
00.0
00.0
043800.0
026495.5
02080.50
0.0
028576.0
015224.0
017304.5
0
Generator
4.75
29800.0
00.0
00.0
029800.0
011331.5
01415.50
0.0
012747.0
017053.0
018468.5
0
Total
(i)
54
7748
.80
0.00
0.00
5477
48.80
49
3462
.77
3911
.63
0.00
4973
74.40
50
374.9
1 54
286.0
3Pr
evio
us Ye
ar (a
)
5477
48.80
0.0
0 0.0
0 54
7748
.80
4763
87.80
17
074.9
7 0.0
0 49
3462
.77
5428
6.03
7136
1.00
(ii) I
ntan
gibl
e Ass
ets
-
To
tal (i
i)
-
-
-
-
-
-
-
-
-
-
Prev
ious
Year
(b)
-
-
-
-
-
-
-
-
-
-
“T
otal
Curre
nt Ye
ar
(i) +
(ii)”
5477
48.80
0.0
0 0.0
0 54
7748
.80
4934
62.77
39
11.63
0.0
0 49
7374
.40
5037
4.91
5428
6.03
“Tot
al Pr
evio
us Ye
ar
(a) +
(b)”
54
7748
.80
0.00
0.00
5477
48.80
47
6387
.80
1707
4.97
0.00
4934
62.77
54
286.0
3 71
361.0
0(ii
i) Ca
pital
Wor
k in
Pr
ogre
ss (a
t cos
t)
Curre
nt Ye
ar
-
-
Prev
ious Y
ear
-
-
Gros
s Blo
ck
De
prec
iatio
n
Ne
t Blo
ck
Not
e N
o. 5
: FI
XED
ASS
ETS
*Therewasnopurchaseofsoftwarewhichwerecapitalisedcxceptembedd
edwiththecomputers
Am
ount
in IN
R
36
6 Note : Non Current Investments
In Equity Shares (Quoted - fully paid up) EnsaSteelLtd. 550 5500.00 550 5500.00 NaharSpinningMillsLtd. 50 12525.00 50 12525.00 PankajPolymersLtd. 3400 27167.62 3400 27167.62 SamtelColorLtd. 200 16940.00 200 16940.00 SkypackLtd. 100 3155.00 100 3155.00 StandardIndustriesLtd. 4000 20000.00 4000 20000.00 SurajDiamonds&JewelleryLtd. 55 3850.00 55 3850.00 UniroyalIndustriesLtd., 1700 17000.00 1700 17000.00 VinylChemicals(India)Ltd. 50 1000.00 50 1000.00
Total 107137.62 107137.62
In Equity Shares (Unquoted - fully paid up) SuryaudaySpinningMills(P)Ltd. 200000 2000000.00 200000 2000000.00 AmrutIndustriesLtd. 1400 2800.00 JindalIron&SteelCompanyLtd. 500 12889.40 JindalLeaseFinLtd. 14100 165070.00 MayarFinanceLtd. 400 8160.00 UpcomCablesLtd. 1200 12000.00 VishalLaktoIndiaLtd. 2000 6000.00 Total 2000000.00 2206919.40
Grand Total 2107137.62 2314057.02
Note1:AggregateamountofQuotedInvestmentsRs.1,07,137.62(PreviousYearRs.1,07,137.62)Note2:MarketValueofQuotedInvestmentsRs.1,14,596.25(PreviousYearRs.1,81,200.50)Note3:BookvaluehasbeentakenintheabsenceofStockExchangequotationsinMarketValueofQuotedInvestmentsNote4:AggregateamountofUn-quotedInvestmentsRs.20,00,000.00(PreviousYearRs.22,06,919.40)
Note Particulars No of As at No of As at No Shares 31.03.2012 Shares 31.03.211 Rs. Rs.
NOTES FORMING PART OF FINANCIAL STATEMENTS AS AT 31.03.2012 Amount in INR
37
NOTES FORMING PART OF FINANCIAL STATEMENTS AS AT 31.03.2012 Note Particulars As at 31.03.2012 As at 31.03.2011 No Rs. Rs. 7 Note : Long Term Loans & Advances (a) Capital Advances - - (b)SecurityDeposits - - (c)Loans&Advancestorelatedparties - - (d)Loans&AdvancestoEmployees - - (e) Prepaid Expenses - - (f) Advance Income Tax - - (g) MAT Credit Entitlement - - (h)BalanceswithGovernmentAuthorities - - (i)OtherLoans&Advances Secured, considered good - - Unsecured,consideredgood GinzaCommunicationsPvtLtd. 14930221.00 13924882.00 PrecisionInfrastructure(P)Ltd. 2500000.00 2500000.00 CitiportCreditLtd. 5000000.00 4244585.00 (j)Doubtful - - 22430221.00 20669467.00 Less:Provisionforotherdoubtfulloans&advances - - 22430221.00 20669467.00
Note:LongTermLoans&Advancesincludeamountsduefrom Directors - - OtherOfficersofcompany - - Firmsinwhichanydirectorisapartner - - Privatecompaniesinwhichanydirectorisadirectorormember - - 8 Note : Other Non-Current Assets Deposits 30000.00 30000.00 TDSReceivable 115738.00 115738.00 145738.00 145738.00 9 Note : Cash and Bank balances Balanceswithbanks; In Deposit Accounts 0.00 0.00 InCurrentAccounts 411190.11 686931.93 Cheques,draftsonhand 336000.00 0.00 Cash on hand 14282.40 220764.00 761472.51 907695.93
Amount in INR
38
NOTES FORMING PART OF FINANCIAL STATEMENTS AS AT 31.03.2012 Note Particulars As at 31.03.2012 As at 31.03.2011 No Rs. Rs. 10 Note : Short Term Loans & Advances (a)Loans&Advancestorelatedparties Secured, considered good - - Unsecured,consideredgood TrinoxInfrastructureandDevelopersPrivateLtd 1094325.00 1438540.00 Doubtful - - 1094325.00 1438540.00 Less:Provisionfordoubtfulloans&advances 1094325.00 1438540.00 (b)SecurityDeposits - - (c)Loans&AdvancestoEmployees - - (d) Prepaid Expenses - - (e)BalanceswithGovernmentAuthorities - - (f) Inter-Corporate Deposits - - (g) Others Secured, considered good - - Unsecured,consideredgood InnovationShowRoom 1505952.00 2205952.00 KatragaddaLaxmiNarasimaRao 2739534.00 2739534.00 Kite Women College of Professional Engineering Sciences 502811.00 516274.00 PhatPhishFilms(P)Ltd 2759735.00 2793238.00 (j)Doubtful - - 8602357.00 9693538.00 Less:Provisionforotherdoubtfulloans&advances - - 8602357.00 9693538.00
Note:ShortTermLoans&Advancesincludeamountsduefrom Directors - - OtherOfficersofcompany - - Firmsinwhichanydirectorisapartner - - Privatecompaniesinwhichanydirectorisadirectorormember - - 11 Note : Other Current Assets Tax deducted at source 168842.00 186785.00 168842.00 186785.00
Amount in INR
39
NOTES FORMING PART OF FINANCIAL STATEMENTS AS AT 31.03.2012 Note Particulars As at 31.03.2012 As at 31.03.2011 No Rs. Rs. 12 Note : Revenue from Operations Interest 1688373.00 1908097.00 OtherfinancialServices 0.00 0.00
1688373.00 1908097.0013 Note : Employee Benefit Expenses Salariesandwages 378000.00 542000.00 Directors Remuneration 300000.00 50000.00 Contributiontoprovidentandotherfunds 0.00 0.00 Staffwelfareexpenses 4704.00 5848.00
682704.00 597848.0014 Note : Other Expenses AdvertisementExpenses 29700.00 26561.00 AuditFee 50562.00 49635.00 ComputerSofware/MaintenanceExp 1250.00 2170.00 ConveyenceExpanses 670.00 2459.00 DeMat & RTA Expanses 51223.00 52044.00 DirectorsSittingFee 0.00 160000.00 Donation 0.00 3600.00 Duties & Taxes 0.00 25500.00 FilingFees 3000.00 6200.00 Internet/CableCharges 6625.00 3015.00 ListingFees 36618.00 34295.00 Meeting Expenses 5251.00 6150.00 OfficeMaintenance 24000.00 8000.00 Postage & Courrier 14210.00 1060.00 Printing&Stationery 25309.00 13383.00 Professional/LegalFees 198540.00 209920.00 Rent 65000.00 60000.00 WebsiteHostingCharges 7000.00 0.00
518958.00 663992.0015 Note : Finance Costs Interest Expense 1071.50 0.00 BankCharges 3880.82 2084.68 Provision for Standard Assets 58831.00 0.00 63783.32 2084.68
Amount in INR
40
NOTE No 16 : SIGNIFICANT ACCOUNTING POLICIES
1. Basis of accounting
TheFinancialStatementsarepreparedunderhistoricalcostconventiononthebasisofgoingconcernand as per Accounting Standards notified under Section 211(3C) of the Companies Act, 1956.TheCompanyfollowstheAccrualsystemofAccountingandPrudentialNormsprescribedbyReserveBankof India consistently from year to year.
2. Use of estimates
Thepreparationoffinancialstatementsinconformitywithgenerallyacceptedaccountingprinciplesrequiresthemanagementtomakeestimatesandassumptionsthataffectthereportedamountsofassetsandliabilitiesandthedisclosureofcontingentliabilitiesonthedateofthefinancialstatementsandthereported amount of revenues and expenses during the reporting periods. Although these estimates are baseduponmanagement’sknowledgeofcurrenteventsandactions,actualresultscoulddifferfromthoseestimatesandrevisions,ifany,arerecognizedinthecurrentandfutureperiods.
3. Intangible assets and amortization
Softwareswhicharenotintegralpartofthehardwareareclassifiedasintangiblesandisstatedatcostlessaccumulatedamortization.Softwaresarebeingamortizedovertheestimatedusefullifeof5years.
4. Fixed assets and depreciation / amortization
FixedAssets(GrossBlock)arestatedathistoricalcostlessaccumulateddepreciation.Costcomprisesthepurchasepriceandanyattributablecostofbringingtheassettoitsworkingconditionforitsintendeduse. Building/specificidentifiableportionofBuilding,includingrelatedequipmentsarecapitalizedwhentheconstructionissubstantiallycompleteoruponreceiptoftheoccupancycertificate,whicheveris earlier. Depreciation on assets is provided on straight-line method at the rates and in the manner prescribedinscheduleXIVtotheCompaniesAct,1956.
5. Investments
Currentinvestmentsarestatedatlowerofcostandfairvalue.Long-terminvestmentsarestatedatcostandprovisionfordiminutioninvalue,otherthantemporary,isconsideredwherevernecessary.Profit/lossonsaleofinvestmentsiscomputedwithreferencetotheaveragecostoftheinvestment.
41
6. Revenue recognition
Revenue is recognized to the extent that it is probable that the economic benefitswill flow to thecompanytherevenuecanbereliablymeasuredonmercantilebasis.
7. Borrowing costs
Borrowing costs that are attributable to the acquisition and / or construction of qualifying assetsare capitalized as part of the cost of such assets, in accordancewithAccounting StandardAS-16 –“BorrowingCosts”.Aqualifyingassetisonethatnecessarilytakesasubstantialperiodoftimetogetreadyforitsintendeduse.CapitalisationofBorrowingCostsissuspendedintheperiodduringwhichtheactivedevelopmentisdelayeddueto,otherthantemporaryinterruption.Allotherborrowingcostsarechargedtotheprofit&lossaccountasincurred.
8. Taxation
Provision for tax for the year comprises current income tax and deferred tax. Current income tax is determinedinrespectoftaxableincomewithdeferredtaxbeingdeterminedasthetaxeffectoftimingdifferencesrepresentingthedifferencebetweentaxableincomeandaccountingincomethatoriginateinoneperiod,andarecapableofreversalinoneormoresubsequentperiod(s).Suchdeferredtaxisquantifiedusingratesandlawsenactedorsubstantivelyenactedasattheendofthefinancialyear.
9. Foreign currency transactions
Transactions in foreign currency and nonmonetary assets are accounted for at the exchange rate prevailing on the date of the transaction. All monetary items denominated in foreign currency are convertedattheyearendexchangerate.AsspecifiedunderAccountingStandard(AS-11)–EffectsofChangesinForeignExchangeRates,theexchangegain/lossontransactionwithregardtotheFixedAssetshasbeencapitalizedalongwithFixedAssets.Theotherexchangegainsrelatedtocurrentassetshasbeenchargedtotheprofit&lossaccount
10. Employees benefits
Expenses and liabilities in respect of employee benefits are recorded in accordance with RevisedAccounting Standard 15 – Employee Benefits (Revised 2005) issued by the Institute of CharteredAccountantsofIndia(the“ICAI”).
42
(i) Provident fund
TheCompanymakescontributiontostatutoryprovidentfundincompliancewiththeEmployeesProvidentFundandMiscellaneousProvisionAct,1952.IntermsoftheGuidanceonimplementingthe revised AS – 15, issued by the Accounting Standard Board of the ICAI, contributionmade towards statutoryprovident fund is treatedasadefinedbenefitplan.Accordingly, thecontributionpaidorpayableandtheinterestshortfall,ifany,isrecognizedasanexpenseintheperiodinwhichservicesarerenderedbytheemployee.
(ii) Gratuity
Gratuityisapostemploymentbenefitandisinthenatureofadefinedbenefitplan.Theliabilityrecognizedinthebalancesheetinrespectofgratuityisthepresentvalueofthedefinedbenefit/obligationatthebalancesheetdatelessthefairvalueofplanassets,togetherwithadjustmentsforunrecognizedactuarialgainsorlossesandpastservicecosts.Thedefinedbenefit/obligationisprovidedatornearthebalancesheetdatebyanindependentactuaryusingtheprojectedunitcredit method. Actuarial gains and losses arising from past experience and changes in actuarial assumptionsarecreditedorchargedtotheprofit&lossaccountintheyearinwhichsuchgainsor losses are determined.
(iii) Compensated absences
Liabilityinrespectofcompensatedabsencesbecomingdueorexpectedtobeavailedwithinoneyearfromthebalancesheetdateisrecognizedonthebasisofundiscountedvalueofestimatedamountrequiredtobepaidorestimatedvalueofbenefitexpectedtobeavailedbytheemployees.
(iv) Other short term benefits
Expenseinrespectofothershort-termbenefitsisrecognizedonthebasisoftheamountpaidorpayablefortheperiodduringwhichservicesarerenderedbytheemployee.
11. Leases
Assetssubjecttooperatingleasesareincludedunderfixedassetsorcurrentassetsasappropriate.Rent(Lease)incomeisrecognizedintheprofit&lossaccountonastraight-linebasisovertheleaseterm.Costs,includingdepreciation,arerecognizedasanexpenseintheprofit&lossaccount.
43
12. Impairment of assets
TheCompanyassessesateachbalancesheetdatewhetherthereisanyindicationthatanassetmaybeimpaired.Ifanysuchindicationexists,theCompanyestimatestherecoverableamountoftheasset.Ifsuchrecoverableamountoftheassetortherecoverableamountofthecashgeneratingunittowhichtheassetbelongsislessthanitscarryingamount,thecarryingamountisreducedtoitsrecoverableamountandthereductionistreatedasanimpairmentlossandisrecognizedintheprofit&lossaccount.Ifatthebalancesheetdatethereisanindicationthatapreviouslyassessedimpairmentlossnolongerexists,therecoverableamountisreassessedandtheassetisreflectedattherecoverableamountsubjecttoamaximumofdepreciatedhistoricalcostandisaccordinglyreversedintheprofit&lossaccount.
13. Provisions, Contingent Liabilities & Contingent Assets:
Depending upon the facts of each case and after due evaluation of legal aspects, claims against the Company are accounted for as either provisions or disclosed as contingent liabilities. In respect ofstatutoryduesdisputed and contestedby theCompany, contingent liabilities areprovided for anddisclosedasperoriginaldemandwithouttakingintoaccountanyinterestorpenaltythatmayaccruethereafter.TheCompanymakesaprovisionwhen there isapresentobligationasa resultofapasteventwheretheoutflowofeconomicresources isprobableandareliableestimateoftheamountofobligationcanbemade.Possiblefutureorpresentobligationsthatmaybutwillprobablynotrequireoutflowofresourcesorwherethesamecannotbereliablyestimated,isdisclosedascontingentliabilityintheFinancialStatements.ContingentAssetsareneitherrecognizedornordisclosedinthefinancialstatements.
14. Earnings per share
Basicearningspershareiscalculatedbydividingthenetprofitorlossfortheperiodattributabletoequityshareholdersbytheweightedaveragenumberofequitysharesoutstandingduringtheperiod.Theweightedaveragenumberofequitysharesoutstandingduringtheperiodareadjustedforeventsincludingabonusissue,bonuselementinarightsissuetoexistingshareholders,sharesplitandreversesharesplit(consolidationofshares).Forthepurposeofcalculatingdilutedearningspershare,thenetprofitorlossfortheperiodattributabletoequityshareholdersandtheweightedaveragenumberofshares outstanding duringtheperiodareadjustedfortheeffectsofalldilutivepotentialequityshares.
44
NOTES FORMING PART OF FINANCIAL STATEMENTS AS AT 31.03.2012 Note Particulars FY 2011-12 FY 2010-11 No Rs. Rs. 17 Note : Auditors Remuneration PaymentstoAuditorscomprises: AsAuditors-StatutoryAudit 35400.00 49635.00 Fortaxationmatters 10110.00 0.00 Forcompanylawmatters 0.00 0.00 Formanagementservices 0.00 0.00 Forotherservices 0.00 0.00 ReimbursementofExpenses 0.00 0.00 Total 45510.00 49635.00 18 Note : Deferred Tax Asset On account of DepreciationandAmortisation 2290.00 3290.00 Total 2290.00 3290.00 19 Note : Earnings Per Share TheCalculationofEarningsPerShare(EPS)asdisclosedintheProfitandLossAccounthasbeen
made inaccordancewithAccountingStandard (AS -20)onEarningsPerShare issuedby theInstitutue of Chartered Accountants of India. A statement on calculation of Basic and diluted EPS isasunder:
ProfitafterTax(INR) 271358 439804 Numberofequityshares(inNos) 3100000 3100000 Earningspershare(INR) 0.09 0.14 20 Note : Tax Expense TheTaxExpensesfortheyearcomprisesof;
CurrentTax 146658.00 196493.00 DeferredTax 1000.00 (9200.00) Provision for tax for the year comprises current income tax and deferred tax. Current income tax
isdeterminedinrespectoftaxableincomewithdeferredtaxbeingdeterminedasthetaxeffectoftimingdifferencesrepresentingthedifferencebetweentaxableincomeandaccountingincomethatoriginateinoneperiod,andarecapableofreversalinoneormoresubsequentperiod(s).Suchdeferredtaxisquantifiedusingratesandlawsenactedorsubstantivelyenactedasattheendofthefinancialyear.
Amount in INR
45
21 Note : Details of Leasing Arrangements ThecompanyhasenteredintooperatingleasearrangementsforitsRegd.Officepremises:
Futureminimumleasepayments not later than one year 60000.00 60000.00 laterthanoneyearandnotfiveyears 0.00 60000.00 Laterthanfiveyears 0.00 00.00 The futureminimumlease rentalobligationundernon-cancellableoperating leases in respect
oftheseassetsisonaccountoflock-inperiodandnoticeperiodinsomeoftheleaseagreementsenteredbythecompanyforoperatingofshowrooms:
OnaccountofLock-inPeriod 0.00 0.00 On account of Notice Period 15000.00 15000.00 22 Note : Disclosures required under Section 22 of the Micro, Small and Medium
Enterprises Development Act, 2006 (i) Principal amount remaining unpaid to any supplier as at the end of the accounting year - - (ii) Interest due thereon remaining unpaid to any supplier as at the end of the accounting year - - (iii) Theamountofinterestpaidalongwiththe amounts of the payment made to the supplier beyondtheappointedday“ - - (iv) Theamountofinterestdueandpayablefortheyear - - (v) The amount of interest accrued and remaining unpaidattheendoftheaccountingyear” - - (vi) Theamountoffurtherinterestdueandpayable eveninthesucceedingyear,untilsuchdatewhen the interest dues as aboveareactuallypaid - -
DuestoMicroandSmallEnterpriseshavebeendeterminedtotheextentsuchpartieshavebeenidentifiedonthebasisofinformationcollectedbytheManagement.Thishasbeenrelieduponbytheauditors.
23 Note : Earnings in foreign currency Nil Nil24 Note : Expenditure in foreign currency Nil Nil
NOTES FORMING PART OF FINANCIAL STATEMENTS AS AT 31.03.2012 Note Particulars FY 2011-12 FY 2010-11 No Rs. Rs.
46
NOTES FORMING PART OF FINANCIAL STATEMENTS AS AT 31.03.2012
S.No. Name of the Related Party Nature of Relationship 1 Madhavi Musnuru Key Management Personnel 2 Ratan Kishan Musnuru Key Management Personnel 3 Prattipati Parthasarathi Key Management Personnel 4 Minjur Doraisamy Ethirajan Key Management Personnel 5 Anil Kumar Talasila Key Management Personnel 6 TalusInfraVenturesPrivateLimited7 GoldenValleyHoldingsLimited8 NorthgateTechnologiesLimited “Enterprisesownorsignificantly9 SocialMediaIndiaLimited influencedbyKeyManagement10 CitizenCommunicationsLimited Personnelortheirrelatives11 ManjeetChemicalsPrivateLimited (Associates)”12 MadhuhaDesignerWearPrivateLimited13 TrinoxInfrastructureandDevelopersPvtLtd
Transations with Related Parties : Amount in INRS.No. Nature of Transaction FY 2011-12 FY 2010-11
Associates KMP Total Associates KMP Total1 Remuneration 0 300000 300000 0 50000 50000
2 SittingFee 0 0 0 0 160000 160000
3 ShortTermLoans -344215 -344215 -1256834 -1256834 & Advances
Balances with Related Parties As At 31.03.2012: (Amount INR)
S.No. Nature of Transaction FY 2011-12 FY 2010-11 Associates KMP Total Associates KMP Total
1 ExpensesPayable - 25000 25000 - - -2 ShortTermLoans 1094325 -1094325 1438540 - 1438540 & Advances
Note No : 25 Related party Disclosures
47
NOTES FORMING PART OF FINANCIAL STATEMENTS AS AT 31.03.2012
Note No. 26 Details of provisions (Amount INR)
TheCompanyhasmadeprovisionforvariouscontractualobligationsanddisputedliabilitiesbasedonitsassessmentoftheamountitestimatestoincurtomeetsuchobligations,detailsofwhicharegivenbelow:S. Particulars As At As AtNo 01.04.2011 Addition Utilisation Reversal 31.03.2012
1 Provisionforwarranty Nil Nil Nil Nil Nil (Nil) (Nil) (Nil) (Nil) (Nil)2 Provision for estimated Nil Nil Nil Nil Nil losses on onerous contracts (Nil) (Nil) (Nil) (Nil) (Nil) Nil Nil Nil Nil Nil (Nil) (Nil) (Nil) (Nil) (Nil)
3 Provision for other contingencies Nil Nil Nil Nil Nil (give details) (Nil) (Nil) (Nil) (Nil) (Nil) Total Nil Nil Nil Nil Nil (Nil) (Nil) (Nil) (Nil) (Nil)
Oftheabove,thefollowingamountsareexpectedtobeincurredwithinayear:
S. No. Particulars As At As At 31.03.2012 31.03.2011
1 Provisionforwarranty Nil Nil
2 “Provisionforestimatedlossesononerous contracts” Nil Nil
3 Provision for other contingencies Nil Nil (give details)
48
NOTES FORMING PART OF FINANCIAL STATEMENTS AS AT 31.03.2012
Note No. Particulars 27 Note : Segment Reporting
The company’s operations consist one line of activity year by year. The Company isprimarilyoperatinginIndiawhichisconsideredasasinglegeographicalsegment.HencetherearenoreportablesegmentsunderAccountingStandard–17,issuedbyInstituteofChartered Accountants of India, during the year under report. The conditions prevailing inIndiabeinguniform,noseparategeographicaldisclosuresareconsiderednecessary.
28 Note : Estimatedamountofcontractsremainingtobeexecutedoncapitalaccountandnotprovided for(netofadvances)is:Nil(Nil) 29 Note : IntheopinionoftheBoard,currentassets,loansandadvancesarestatedatavaluewhich couldberealizedintheordinarycourseofbusiness.Theprovisionforallknownliabilities madeisadequateandnotinexcessoftheamountreasonablynecessary. 30 Note : AdditionalinformationpursuanttoNon-BankingFinancial(Non-DepositAcceptingor Holding)Companies PrudentialNorms(ReserveBank)Directions,2007isannexed. As per the report of even date attached For GV & Co., ForandOnbehalfoftheBoardChartered Accountants Sd/- Sd/- Sd/- Grandh Vittal Madhavi Musnuru Parthasarathi PrattipatiPropreitor Whole Time Director DirectorMembershipNo.206462 FirmRegn.No.012875S Place:Hyderabad Date:30.05.2012
49
Schedule to the Balance Sheet of M/sCitiportFinancialServicesLimitedAsOn31.03.2011
(Asrequiredintermsofparagraph13ofNon-BankingFinancial(Non-DepositAcceptingorHolding)CompaniesPrudentialNorms(ReserveBank)Directions,2007)
(Amount in INR)
S. Particulars Amount Amount No Outstanding overdue
Liabilities side : (1) Loans and advances availed by the Non-Banking Financial Company inclusive of interest accrued thereon but not paid:
(a) Debentures : Secured Nil Nil : Unsecured Nil Nil (otherthanfallingwithinthe meaningofpublicdeposits) (b) DeferredCredits Nil Nil (c) TermLoans Nil Nil (d) Inter-corporateloansandborrowing Nil Nil (e) Commercial Paper Nil Nil (f) OtherLoans(specifynature) Nil Nil
S. Particulars Amount No Outstanding
Assets side : (2) Break-up of Loans and Advances including Bills Receivables: [Other than those included in (4) below] :
(a) Secured Nil (b) Unsecured 3,10,32,578
(3) Break up of Leased Assets and stock on hire and other assets counting towards AFC activities:
i) Leaseassetsincludingleaserentalsundersundrydebtors:(a) Financiallease Nil(b) Operatinglease Nil
ii) Stockonhireincludinghirechargesundersundrydebtors:(a) Assets on hire Nil (b) RepossessedAssets Nil
50
iii) OtherloanscountingtowardsAFCactivities (a) Loanswhereassetshavebeenrepossessed (b) Loansotherthan(a)above Nil Nil
(4) Break-up of Investments : CurrentInvestments:
1. Quoted:
(i) Shares: (a)Equity Nil (b)Preference Nil
(ii) DebenturesandBonds(iii) Unitsofmutualfunds Nil(iv) Government Securities Nil(v) Others (please specify) Nil
2. Unquoted:
(i) Shares: (a)Equity Nil (b)Preference Nil(ii) DebenturesandBonds Nil(iii) Unitsofmutualfunds Nil(iv) Government Securities Nil(v) Others (please specify) Nil
Long Term investments :
1. Quoted:
(i) Shares: (a)Equity 1,07,138 (b)Preference Nil(ii) DebenturesandBonds Nil(iii) Unitsofmutualfunds Nil(iv) Government Securities Nil(v) Others (please specify) Nil
2. Unquoted:(i) Shares:(a)Equity 20,00,000 (b)Preference Nil(ii) DebenturesandBonds Nil(iii) Unitsofmutualfunds Nil(iv) Government Securities Nil(v) Others (please specify) Nil
51
Sd/- Sd/- MADHAVIMUSNURU PARTHASARATHIPRATTIPATI Whole Time Director Director
ForandOnbehalfoftheBoardFor GV & Co Chartered AccountantsSd/- Grandhi Vittal Propreitor MembershipNo.206462FirmRegn.No.012875S
(5) BorrowerGroup-WiseClassificationofAssetsFinancedasin(2)and(3)above: Amountnetofprovisions
Secured Unsecured Total1. Related Parties (a) Subsidiaries Nil Nil Nil (b) Companies in the same Group Nil Nil Nil (c) Other related parties Nil 10,94,325 Nil2. Other than related parties Nil 2,99,38,253 Nil Total Nil 3,10,32,578 Nil
(6) InvestorGroup-WiseClassificationofAllInvestments(CurrentandLongTerm)inSharesandSecurities(BothQuotedandUnquoted): MarketValue/ BookValue Breakuporfairvalue (NetofProvisions) orNAV(Quoted) (Unquoted)
1. Related Parties (a) Subsidiaries Nil Nil (b) Companies in the same Group Nil Nil (c) Other related parties Nil Nil2. Other than related parties 1,14,596 20,00,000
Total 1,14,596 20,00,000
Particulars Amount(7) Otherinformation
1. Gross Non-Performing Assets (a) Related parties (b) Other than related parties2. NetNon-PerformingAssets Nil (a) Related parties (b) Other than related parties3. Assetsacquiredinsatisfactionofdebt
Category
Category
Place:HyderabadDate:30/05/2012
5248
THIS PAGE INTENTIONALLY LEFT BLANK
53
CITIPORT FINANCIAL SERVICES LIMITEDRegisteredOffice:HouseNo.8-3-678/42/5,1stFloor,SantoshManor,NavodayaColony,
Yellareddyguda,Hyderabad-500073.ATTENDANCE SLIP
(Tobehandedoverattheentranceofthemeetinghall)20THANNUALGENERALMEETINGSATURDAY,29THSEPTEMBER2012
I/Weherebyrecord/my/ourpresenceatthe20thAnnualGeneralMeetingoftheMembersoftheCompanywill beheldat the RegisteredOfficeof theCompanyatHouseNo.8-3-678/42/5,1stFloor,SantoshManor,NavodayaColony,Yellareddyguda,Hyderabad-500073.onSATURDAY 29th SEPTEMBER, 2012 at 02.00 p.m.
FullNameoftheMember:..............................................................................................................................(InBlockLetters)
Regd.FolioNo.:........................................................NoofSharesheld.......................................................FullNameofProxy:
FullNameofProxy:.........................................................................................................................................(InblockLettrs)
SIGNATURE(S)OFTHEMEMBER(S)ORPROXY/PROXIESPRESENT
PROXY FORM
Regd.FolioNo.:...............................................................NoofSharesheld...............................................I/We................................................................................................. of................................................................ being aMember/Members of CITIPORT FINANCIAL SERVICES LIMITED here byappoint.............................................................................................................................of.....................................................................................failing him/her.......................................................................of...............................................................................................of....................................................................as my/our proxy toattendandvoteforme/usandonmy/ourbehalfonSATURDAY 29th SEPTEMBER, 2012 at 02.00 p.m. RegisteredOfficeoftheCompanyatHouseNo.8-3-678/42/5,1stFloor,SantoshManor,NavodayaColony,Yellareddyguda,Hyderabad-500073
As Witnessed my hand / our hands this.................day of............................2012
Signature................................................
Note:Theformordertobeeffectiveshouldbedulycompleted,stampedandsignedandmustbedepositedattheRegisteredOfficeoftheCompany48hoursbeforethemeeting.
✁
Signatureaccross
Re. 1Revenue
Stamp
REGISTERED OFFICEHouse No.8-3-678/42/5,1stFloor, SantoshManor,NavodayaC o l o n y, Ye l l a r e d d y g u d a , Hyderabad-500073
if undelivered please return to :
CITI PORT FINANCIAL SERVICES LIMITED