FUTURE RELIANCE CAPITAL Notes to Accounts

Notes:


* Includes provision for expenses, statutory payables, securitisation / assignment payable and other payables.


# Does not include any amounts, due and outstanding, to be transferred to the Investor Education and Protection Fund created pursuant to Section 125 of the Companies Act, 2013.


5. Pursuant to the event of merger or business combination of Yatra Online Inc. with Terrapin 3 Acquisition Corporation, the company has allotted 3023771 equity shares against conversion of 4200042 Series A, 27, 31,960 Series B & 1144946 Series C Preference share of Yatra Online Inc. subsequently these equity share are listed on New York Stock Exchange .


6. Investment in 38,85,24,405 (Previous year 38,85,24,405) equity shares of Reliance Nippon Life Insurance Company Limited and 9,000 (Previous year 9,000) equity shares of Reliance DigiTech Limited (formerly Reliance CWT India Limited) are carried at fair value i.e. at amount transferred under the Scheme of Amalgamation.


7. Pursuant to Scheme of Arrangement effective on February 7, 2017, Reliance Money Express Limited (RMEL) got merged with Reliance Securities Limited (RSL) on account which RSL issued preference shares to the extent of equity shares of RMEL.


8. The Company has been allotted Warrants without paying any consideration at the time of allotment.


9. The Company has entered into a joint venture with KGS Developers Limited in respect of real estate project development. The Company has invested Rs, 85 crore in the financial year 2008-09, current year outstanding is Rs, 69 crore and is entitled to share the Profit / Loss equally. However assets, liabilities, revenue and expenses related to the project were not included in the financial statements of the Company of the previous year as it does not meet the definition criteria of a Joint Venture under AS 27 ''''''''Financial Reporting of Interests in Joint Ventures". In the current year, as a part of the settlement award granted by the Arbitral Tribunal, the Company has been granted with the land of the real estate project. Accordingly, pending the transfer of land the amount has been re-classified as capex advances.


10. Investments include Rs, Nil (Previous year Rs, 67 crore) of equity shares given as collateral/pledge towards margin with brokers.


11. # Investments in Nil (Previous year 33 197) equity shares of Jindal Saw Limited amounting to Rs, Nil (Previous year Rs, 29 96 693) are given to comply with the margin requirements, thus these securities are not in the name of the Company.


In respect of balances with Scheduled Banks in Fixed deposit accounts, Rs, Nil (Previous year Rs, 42 crore) is kept as credit enhancement towards securitization / assignment transaction, Rs, 5 33 932 (Previous year Rs, 5 33 932) is kept as deposit with sales tax authority, Rs, 20 00 000 (Previous year Rs, 5 00 000) is kept as deposit with the Pension Fund Regulatory and Development Authority (PFRDA) and Rs, Nil (Previous year Rs, 32 crore) is kept as deposit with stock exchanges for margins.


1. Security clause / maturity profiles in respect to Secured Loans from banks / debentures


(i) Non convertible debentures (NCDs) are redeemable at par, in one or more installments, on various dates:


(a) NCDs amounting to Rs, 4 039 crore (Previous year Rs, 4 378 crore) are secured by way of first pari passu legal mortgage and charge over the premises situated at Avdesh House, near Pritam Nagar, Ellisbridge, Ahmedabad and additional first pari passu charge by way of hypothecation on present and future book debts / business receivables of the Company. Business receivables includes Fixed Asset, Current Assets, Investments and any other assets, against security not exceeding Rs, 4 288 crore (Previous year Rs, 4 935 crore).


(b) NCDs amounting to Rs, 9 790 crore (Previous year Rs, 4 992 crore) are secured by way of first pari passu legal mortgage and charge over the premises situated at Avdesh House, near Pritam Nagar, Ellisbridge, Ahmedabad and additional first pari passu charge by way of hypothecation on present and future book debts / business receivables of the Company (except security towards securing Outstanding Term Loan and Cash Credit Limits). Business receivables includes Current Assets and Investments, against security not exceeding Rs, 9 915 crore (Previous year Rs, 5 317 crore).


(c) Unsecured NCDs amounting to Rs, 1 423 crore (Previous year Rs, 1 423 crore) are in respect to Tier II subordinate debts.


(d) Maturity profile and Rate of interest of Non Convertible Debentures are as set out below:


# Zero coupon deep discount non convertible debentures


(ii) Term Loans from banks includes Rs, Nil (Previous year Rs, 6 939 crore) are secured by pari passu first charge on all present and future book debts, receivables, bills, claims and loan assets of the Company''''s commercial finance division.


2. The Company was a partner in Reliance Capital Partners and ceased to be a partner as on March 31, 2017


a) The firm consists of following partners and their balances:


b) Profit Sharing Ratio: The profit / (loss) is distributed between the partners on the basis of the weighted average capital. The loss for the current financial year is Rs, 0.39 crore (Previous year Profit Rs, 13 crore).


3. Tax on Proposed Dividend


In view of Section 115 - O of the Income Tax Act, 1961, the Company has reduced its dividend tax liabilities to the extent dividend received / receivable from its subsidiary company viz. Reliance Nippon Life Asset Management Limited:


4. Employees Stock Option Plans


a) The Company operated two Employee Stock Option Plans; ESOS Plan A and ESOS Plan B introduced in the financial year 2009-10. All options granted under the ESOS Plan A and ESOS Plan B have been surrendered and lapsed in the previous year. The Company managed the ESOS Plan A and ESOS Plan B through a Trust. Advance of Rs, 59 crore (net of written off Rs, 64 crore) Previous Year Rs, 59 crore (net of written off Rs, 64 crore) has been granted to Trust. Out of the said advance, Trust has purchased 16 00 000 equity shares for the above purpose.


b) The Company introduced ESOP 2015 which covers eligible employees of the Company and its subsidiaries. The vesting of the options is from expiry of one year till five years as per Plan. Each Option entitles the holder thereof to apply for and be allotted/transferred one Equity Share of the Company upon payment of the exercise price during the exercise period.


The Company has chosen to account for the Plan by the Intrinic Value Method. The total expense recognized for the period arising from stock option plan as per Intrinic Value Method is Rs, Nil (Previous year Rs, Nil). Had the Company adopted fair value method the net results for the year would have been lower by Rs, 89 lakh (Previous year Rs, Nil) [net of tax saving Rs, 71 lakh (Previous year Rs, Nil)] and accordingly EPS (Both Basic and Diluted) would have been lower by Rs, 0.03 (Previous year Rs, 0.03).


c) Other employee benefits


Phantom Stock Option Scheme:


As a long term incentive plan to employees, the Company has initiated Phantom Stock Option Plan on October 15, 2015 which are cash settlement rights where the employees are entitled to get cash compensation based on a agreed formulae linked to market value of subsidiary company shares upon exercise of phantom stock options over notional or hypothetical shares,


Liability towards the scheme is accounted for on the basis of an independent actuarial valuation done at the year end. The valuation of the shares is done considering the Projected Unit Credit Method and the progression of share price up to the exercise of the option. Fair Value of Phantom Stock Options was estimated on the date of grant on the assumptions of Discount Rate of 6.77% and Expected Life of 4 years.


Vested Phantom Options can be exercised on continuation of employment any time upto 3 years from the date of last vesting and upon cessation of employment as per the terms of the Scheme. Settlement of Phantom Option is done in cash within 90 days from the date of exercise. For the current year the Company has created provision of Rs, 2 crore (Previous year Rs, 1 crore).


Notes:


i) The above figures are shown in rupees in crore with two decimals to be more representative.


ii) The estimates of future salary increases considered in actuarial valuation takes into account inflation, seniority, promotion and other relevant factors.


iii) General Descriptions of significant defined plans:


a) Gratuity plan


Gratuity is payable to all eligible employees of the Company on superannuation, death and permanent disablement, in terms of the provisions of the Payment of Gratuity Act, 1 972 or as per the Company''''s Scheme whichever is more beneficial.


b) Leave plan


Encashment of leave can be availed by the employee for balance in the earned account as on January 1, 2009. All carry forward earned leaves with a maximum limit of 10 Days, are available for a ailment but not for encashment.


5. Segment reporting


As per paragraph 4 of Accounting Standard (AS) 17, on "Segment Reporting" notified by the Companies (Accounts) Rules, 2014, where a single financial report contains both consolidated financial statements and the separate financial statements of the holding company, segment reporting needs to be presented only on the basis of consolidated financial statements. In view of this, segment information has been presented at Note No. 46 of the consolidated financial statements.


6. Related party disclosures


A. List of Related Parties and their relationship:


i) Major investing party


Reliance Inceptum Private Limited


ii) Individual Promoter


Shri Anil D. Ambani, the person having control during the year.


iii) Subsidiaries


1 Reliance Nippon Life Asset Management Limited 15 Reliance Securities Limited (RSL)


(formerly Reliance Capital Asset Management Limited)


(RNLAML)


2 Reliance Asset Management (Mauritius) Limited 16 Reliance Commodities Limited (RCoL)


(RAMML)


3 Reliance Asset Management (Singapore) Pte. Limited 17 Reliance Financial Limited (RFL)


(RAMSL)


4 Reliance Capital Asset Management (UK) Limited 18 Reliance Money Express Limited (RMEL) (RCAMUL) (dissolved w.e.f. June 14, 2016) (ceased w.e.f. February 7, 2017)


5 Reliance Capital Pension Fund Limited (RCPFL) 19 Reliance Money Precious Metals Private Limited


(RMPMPL)


6 Reliance AIF Management Company Limited (RAMCL) 20 Reliance Money Solutions Private Limited


(RMSPL)


7 Reliance Capital Trustee Co. Limited (RCTC) 21 Reliance Wealth Management Limited (RWML)


8 Reliance General Insurance Company Limited (RGICL) 22 Quant Capital Private Limited (QCPL)


9 Reliance Nippon Life Insurance Company Limited 23 Quant Capital Finance and Investments Private (formerly Reliance Life Insurance Company Limited) Limited (QCFIPL) (ceased w.e.f. July 7, 2016) (RNLICL)


10 Reliance Commercial Finance Limited (formerly Reliance 24 Quant Broking Private Limited (QBPL)


Gilts Limited) (RCFL)


11 Reliance Home Finance Limited (RHFL) 25 Quant Commodity Broking Private Limited


(QCBPL) (ceased w.e.f. August 18, 2016)


12 Reliance Exchangenext Limited (RNext) 26 Quant Investment Services Private Limited


(QISPL)


13 Reliance Corporate Advisory Services Limited (RCASL) 27 Quant Securities Private Limited (QSPL)


(formerly Reliance Spot Exchange Infrastructure Limited)


14 Reliance Capital AIF Trustee Company Private Limited (RCATCPL)


iv) Partnership firm


Reliance Capital Partners (RCP) (ceased w.e.f. March 31, 2017)


v) Associates


1 Reliance Asset Reconstruction Company Limited (RARC) 3 Indian Commodity Exchange Limited (ICEX)


2 Ammolite Holdings Limited (AHL) 4 Quant Commodity Broking Private Limited QCBPL)


(w.e.f. from August 18, 2016)


vi) Key Managerial Personnel (KMP) and KMP Relatives


1 Shri Soumen Ghosh - Executive Director & Group CEO (ceased w.e.f. March 31, 2017)


2 Shri Amit Bapna - Chief Financial Officer


3 Shri V. R. Mohan - President & Company Secretary (superannuation w.e.f. March 31, 2017)


4 Smt. Caroline Ghosh - KMP Relative (ceased w.e.f. March 31, 2017)


5 Shri Vijay Singh Bapna - KMP Relative


6 Shri Atul Tandon - Company Secretary & Compliance Officer (w.e.f. February 10, 2017)


7 Shri Jai Anmol Ambani - Executive Director (w.e.f. September 27, 2016)


D. The nature and volume of material transactions for the year with above related parties are as follows:


Debentures (Borrowings)


Debentures redeemed during the year include Rs, 167 crore (Previous year Rs, 152 crore) to RSL, Rs, 40 crore (Previous year Rs, Nil) to RGICL and Rs, 39 crore (Previous year Rs, Nil) to RFL. Debentures as at March 31 2017 includes Rs, 9 crore (Previous year Rs, 12 crore) to RSL, Rs, 225 crore (Previous year Rs, 225 crore) to RGICL and Rs, 12 crore (Previous year Rs, Nil) to RFL. Accrued Interest on debentures as at March 31, 2017 include Rs, 14 crore (Previous year Rs, 10 crore) to RGICL.


Fixed Assets


Fixed assets purchased during the year, include Rs, Nil (Previous year Rs, 48,86,889) from RCIL. Fixed assets sold during the year include Rs, Nil (Previous year Rs, 6,06,392) to RMSPL and Rs, 3,28,811 (Previous year Rs, Nil) to Shri V. R. Mohan.


Investments


Investments subscribed / purchased during the year include Rs, 2,150 crore (Previous year Rs, 51 crore) from RCFL, Rs, Nil (Previous year Rs, 66 crore) from RFL, Rs, Nil (Previous year Rs, 25 crore) from RMSPL, Rs, 1,218 crore (Previous year Rs, Nil) from RCASL, Rs, 200 crore (Previous year Rs, Nil) from RhFL, Rs, Nil (Previous year Rs, 17 crore) from RMPMPL and includes Rs, 3 crore (Previous year Rs, Nil) from NCPL. Investments redeemed / sold during the year include Rs, 113 crore (Previous year Rs, Nil) to RNLICL, Rs, 126 crore (Previous year Rs, Nil) to RHFL, '''' 859 crore (Previous year '''' Nil) to


RCASL and includes Rs, Nil (Previous year Rs, 632 crore) to RBEPL. Investments Balance as at March 31, 2017 includes Rs, 1,837 crore (Previous year Rs, 1,742 crore) of RGICL, Rs, 521 crore (Previous year Rs, 321 crore) to RHFL, Rs, 175 crore (Previous year Rs, 150 crore) of RSL, Rs, 200 crore (Previous year Rs, 200 crore) of QCPL, Rs, 35 crore (Previous year Rs, 13 crore) of RNext [Net of written off Rs, 69 crore (Previous year Rs, 69 crore)], Rs, 5,077 crore (Previous year Rs, 5,077 crore) of RNLICL, Rs, 247 crore (Previous year Rs, 247 crore) of RNLAM and Rs, 1,218 crore (Previous year Rs, Nil) of RCASL, Rs, 2,213 crore (Previous year Rs, 63 crore) from RCFL Rs, 180 crore (Previous year Rs, 220 crore) of RCL [Net of provision of Rs, 113 crore (Previous year Rs, 73 crore)], Rs, 49 crore (Previous year Rs, 49 crore) of RARC, Rs, Nil (Previous year Rs, Nil) of AHL [Net of Provision Rs, 29 crore (Previous year Rs, 29 crore)].


Partnership Current Accounts


Withdrawal during the year (Net) include Rs, 76 crore (Previous year Rs, 253 crore) from RCP. Profit / (Loss) of Partnership firm during the year include Loss Rs, 39,13,466 (Previous year Profit Rs, 13 crore) from RCP.Balance as at March 31, 2017 Rs, Nil (Previous year Rs, 76 crore) of RCP.


Loans Given


Loans given during the year includes Rs, 5 crore (Previous year Rs, 23 crore) to RFL, Rs, Nil (Previous year Rs, 27 crore) to RMSPL, Rs, 1,104 crore (Previous year Rs, Nil) to RCASL, Rs, 60 crore (Previous year Rs, 65 crore) to RSL; Rs, 824 crore (Previous year Rs, 2,104 crore) to RCL, Rs, 300 crore (Previous year Rs, Nil) to RCIL, Rs, 155 crore (Previous year Rs, 140 crore) to RBEPL, Rs, 377 crore (Previous year Rs, 325 crore) to RIL. Loan Returned/Adjusted during the year include Rs, 10 crore (Previous year Rs, 18 crore) from RFL, Rs, Nil (Previous year Rs, 27 crore) from RMSPL, Rs, 802 crore (Previous year Rs, Nil) from RCASL, Rs, 60 crore (Previous year Rs, 65 crore) to RSL; Rs, Nil crore (Previous year Rs, 1,999 crore) to RCL, Rs, 569 crore (Previous year Rs, 80 crore) from RBEPL and Rs, 1 crore (Previous year Rs, 325 crore) from RIL. Loans as at March 31, 2017 include Rs, Nil (Previous year Rs, 5 crore) to RFL, Rs, Nil (Previous year Rs, Nil) to RNext [Net of Provision of Rs, 7 crore (Previous year Rs, 7 crore)], Rs, 302 crore (Previous year Rs, Nil) to RCASL, Rs, 376 crore (Previous year Rs, Nil) to RIL, Rs, 824 crore (Previous year Rs, 106 crore) to RCL, Rs, 300 crore (Previous year Rs, Nil) to RCIL, Rs, 155 crore (Previous year Rs, 709 crore) to RBEPL; Rs, Nil (Previous year Rs, 44,64,047) to Shri V. R. Mohan, Rs, Nil (Previous year Rs, 1 crore) to Shri Soumen Ghosh and Rs, Nil (Previous year Rs, 47,74,487) to Smt. Caroline Ghosh. Accrued Interest on loans as at March 31, 2017 includes Rs, 4 crore (Previous year Rs, 77 crore) from RBEPL, Rs, 1 crore (Previous year Rs, Nil) to RIL and Rs, 3 crore (Previous year Rs, Nil) to RCL.


Advances


Advances as at March 31, 2017 includes Rs, 1 crore (Previous year Rs, 93 crore) to RGICL, Rs, Nil (Previous year Rs, 1 crore) to RNLICL, Rs, 2 crore (Previous year Rs, Nil) to RSL, include Rs, Nil (Previous year Rs, 1 crore) to RCL, Rs, Nil [Previous year Rs, Nil (Net of Rs, 75 crore given & refunded)] to RCIL and Rs, 5,42,1 67 (Previous year Rs, 18,06,490) to RARC.


Income


Interest & Finance Income (including Premium on Preference Shares) includes Rs, 1 crore (Previous year Rs, 1 crore) from RSL, Rs, 98,630 (Previous year Rs, 3,63,616) from RFL, Rs, 3 crore (Previous year Rs, Nil) from RCASL, Rs, Nil (Previous year Rs, 1 crore) from RMSPL; Rs, 3 crore (Previous year Rs, 24 crore) from RCL, Rs, 28 crore (Previous year Rs, 91 crore) from RBEPL Rs, Nil (Previous year Rs, 3,29,535) from Shri V. R. Mohan, Rs, Nil (Previous year Rs, 9,96,021) from Shri Soumen Ghosh, Rs, Nil (Previous year Rs, 6,62,387) from Smt. Caroline Ghosh and Rs, Nil (Previous year Rs, 1,62,534) from Shri Vijay Singh Bapna. Rent income include Rs, 9,00,000 (Previous year Rs, 9,00,000) from RCIL. Dividend Income includes Rs, 126 crore (Previous year Rs, 81 crore) from RNLAM, Rs, Nil (Previous year Rs, 46 crore) from RNLICL and Rs, 1 crore (Previous year Rs, 1 crore) from RARC. Reimbursement of Expenditure include Rs, 7 crore (Previous year Rs, 7 crore) from RGICL, Rs, 3 crore (Previous year Rs, 2 crore) from RNLAM, Rs, 2 crore (Previous year Rs, 2 crore) from RSL, Rs, 14,51,114 (Previous year Rs, 8 crore) from RHFL, Rs, 9 crore (Previous year Rs, 10 crore) from RNLICL, Rs, 4,93,380 (Previous year Rs, 11,69,618) from RCIL and Rs, 7,20,996 (Previous year Rs, Nil) from RARC. Management Fees include Rs, 6 crore (Previous year Rs, 6 crore) from RGICL, Rs, 6 crore (Previous year Rs, 6 crore) from RNLAM, Rs, 6 crore (Previous year Rs, 6 crore) from RSL, Rs, 3 crore (Previous year Rs, 3 crore) from RHFL and Rs, 6 crore (Previous year Rs, 6 crore) from RNLICL. Income transferred as per Business Transfer Agreement includes Rs, 1 crore (Previous year Rs, 1 crore) to RHFL. Other operating incomes includes Rs, 5,20,000 (Previous year Rs, 29,63,000) from RARC.


Expenditure


Finance cost includes Rs, 24 crore (Previous year Rs, 23 crore) to RGICL, Rs, 10 crore (Previous year Rs, Nil) to RFL, Rs, 52 crore (Previous year Rs, 54 crore) to RSL, and Rs, Nil (Previous year Rs, 3 crore) to RNLICL. Insurance includes Rs, 3 crore (Previous year Rs, 3 crore) to RGICL and [Rs, 22,78,1 25 (Previous year Rs, 48,17,137) to RNLICL. Rent include Rs, Nil (Previous year Rs, 1 crore) to RCL. Brokerage paid during the year Rs, 1 crore (Previous year Rs, 1 crore) to RSL. Expense transferred as per Business Transfer Agreement include Rs, 1 crore (Previous year Rs, 1 crore) to RHFL. Reimbursement of Expenditure includes Rs, Nil (Previous year Rs, 1 crore) to RGICL and Rs, 1 crore (Previous year Rs, Nil) to RSL. Provision / (Reversal) for diminution in value of investments includes Rs, Nil (Previous year reversal Rs, 69 crore) of RNext, Rs, Nil (Previous year reversal Rs, 8 crore) of RMPMPL and reversal of Rs, 3 crore (Previous year Rs, Nil) of RCFL Rs, 40 crore (Previous year Rs, Nil) of RCL. Investments written off include Rs, Nil (Previous year Rs, 69 crore) of RNext, Rs, Nil (Previous year Rs, 8 crore) of RMPMPL. Valuation Expenses include Rs, Nil (Previous year Rs, 38,57,142 ) paid to RHFL. Employee benefit expenses include Rs, 1 crore (Previous year Rs, 1 crore) to Shri V. R. Mohan, Rs, 8 crore (Previous year Rs, 8 crore) to Shri Soumen Ghosh, Rs, 3 crore (Previous year Rs, 3 crore) to Shri Amit Bapna, Rs, 9,88,038 (Previous year Rs, Nil) to Shri Atul Tandon and Rs, 1 crore (Previous year Rs, Nil) to Shri Jai Anmol Ambani.


Contingent Liability


Guarantees to Banks and Financial Institutions on behalf of third parties include Rs, 50 crore (Previous year Rs, 50 crore) for RBEPL, Rs, 550 crore (Previous year Rs, Nil) for RIL, Rs, 118 crore (Previous year Rs, Nil) to RCL and Rs, 118 crore (Previous year Rs, Nil) to RCIL.


Shares given as collateral


Shares given as collateral include Rs, Nil (Previous year Rs, 29,96,529) to RSL.


Shares given as pledge


Shares given as pledge include Rs, Nil (Previous year Rs, 67 crore) to RSL.


Notes :


i) Figures in bracket indicate previous year figures.


ii) Expenses incurred towards public utilities services such as communication and electricity charges have not been considered for related party transaction.


iii) The above discloses transactions entered during the period of existence of related party relationship. The balances and transactions are not disclosed before existence of related party relationship and after cessation of related party relationship.


iv) In regard to transactions with Reliance Commercial Finance Limited till effective date of demerger Refer note no. 38(iv).


v) Director Sitting Fee of Rs, 2,40,000 (Previous year Rs, 1,60,000) has been paid to Shri Anil D. Ambani, an individual having control.


vi) The Company has provided security amounting to Rs, 707 crore for the Listed Secured Non-Convertible Debentures of its wholly-owned subsidiary viz. Reliance Home Finance Limited by way of first pari passu hypothecation charge on all present and future book debts and business receivables of the Company (except security created / to be created towards securing term loans and cash credit limits). Business receivables includes current assets and investments.


vii) Shri Jai Anmol Ambani was paid sitting fees of Rs, 40,000 for attending the board meeting held on September 13, 2016, prior to his appointment as Executive Director w.e.f September 27, 2016.


7. Leases


The Company has given assets on Operating lease (Refer Note No. 14). Disclosure as per Accounting Standard (AS-19), on "Leases" notified by the Companies (Accounts) Rules 2014:


8 Scheme of Arrangement (Demerger) between the Company and Reliance Commercial Finance Limited


The Board of Directors of the Company at its meeting held on February 25, 201 6 has considered and approved a Scheme of Arrangement (Demerger) between the Company, and its wholly owned subsidiary viz. Reliance Commercial Finance Limited (formerly Reliance Gilts Limited). The Scheme of Arrangement under Sections 391 to 394 of the Companies Act, 1 956 (the ''''Scheme'''') for demerger of Commercial Finance Business of the Company to its wholly owned subsidiary viz. Reliance Commercial Finance Limited has been approved by the Hon''''ble High Court of Judicature at Bombay. The Scheme has become effective on March 24, 2017 upon filing with the Registrar of Companies, Maharashtra at Mumbai with effect from April 1, 2016 i.e. Appointed Date.


Hence, in accordance with the Scheme:-


i. On Scheme becoming effective with effect from Appointed Date, the Company has transferred all the assets aggregating to Rs, 12,473 crore and liabilities aggregating to Rs, 1 2, 473 crore as appearing in the books of Company related to commercial finance business at their respective book value as on Appointed Date. The net assets taken over include:


ii There is no difference between value of assets and liabilities of the Company''''s commercial finance business as transferred under Scheme, accordingly there is no capital reserve or goodwill.


iii As per the Scheme approved by the Hon''''ble High Court of Judicature at Bombay with effect from the Appointed Date and up to and including the effective date, the Company shall be deemed to have been carrying on all business and activities relating to Commercial Finance Business for and on account of and in trust of Commercial Finance Business. All profits accruing to Commercial Finance Business or losses arising or incurred by the Company in relation to the Commercial Finance Business for the period commencing from the Appointed Date to the Effective Date shall, for all purposes, be treated as the profits or losses, as the case may be, of Commercial Finance Business.


iv During the period, from the Appointed Date to the Effective Date, the Company received the inter division balance amounting to Rs, 2,874 crore (average balance during the year Rs, 829 crore) on which the Company has recieved interest of Rs, 91crore from Reliance Commercial Finance Limited. During this period, the Company has also received reimbursement of expenses amounting to Rs, 2 crore and management fees amounting to Rs, 3 crore.


Accordingly, aforesaid Commercial Finance Business was considered as discontinuing operations during previous year.


9 The Board of Directors of the Company at their meeting held on October 28, 2016 has approved a Scheme of Arrangement (''''Scheme'''') for demerger of Real Estate Lending Business of the Company into its wholly owned subsidiary viz. Reliance Home Finance Limited (RHFL) with effect from April 1, 2017, the Appointed Date. The Scheme is subject to requisite approvals, including the sanction of National Company Law Tribunal. Upon the scheme getting approved, RHFL shall issue and allot, at par, to all equity shareholders of the Company, 1 (One) fully paid Equity Share of RHFL for every 1 (One) equity share of '''' 10 each fully paid up held in the Company. RHFL will list its equity shares on the Stock Exchanges.


10 Core Investment Company (‘CIC'''')


(i) On the Scheme of Demerger becoming effective on March 24, 201 7, the Company has positioned itself as a Core Investment Company (''''CIC'''') and in terms of the Core Investment Companies (Reserve Bank) Directions, 2016 (RBI CIC Directions) would make an application for obtaining Certificate of Registration within 3 months based on the Audited Financial Statements as of March 31, 2017.


The Company was in compliance with the RBI Directions applicable to Systemically Important Non-Banking Financial Company until March 24, 201 7 and has taken necessary measures so as to comply with the prudential norms applicable to CIC and has commenced adherence to those norms e.g. Concentration norms, Leverage ratio, Capital to Risk Assets Ratio (CRAR) etc. as of March 31, 2017. Accordingly, the Company has prepared and presented its financial statements and disclosures for the year ended March 31, 2017 as per RBI Directions applicable to CIC. The above is in line with the Company''''s communications with RBI.


a) Housing loans / loans against property and construction finance granted are secured by equitable registered mortgage of property and / or undertaking to create a security and other loans and advances are secured by way of hypothecation and/or pledging of the underlying asset.


b) In case of loans & advances given in para (2) above, Provision for NPA & Doubtful Debts is '''' 7 crore (Previous year '''' 99 crore) (3) Break up of Leased Assets and stock on hire and other assets counting towards AFC activities


a) Companies in same group means companies under the same management as per section 370(1 B) of the Companies Act, 1956.


b) In case of unquoted investments, in the absence of market value, book value has been considered.


c) Capital contribution in Partnership Firm and unincorporated joint venture have not been considered for the purpose of companies in the same group and other related party:


d) Investments are classified between non-current and current investments (including current portion of long term investments) as required under revised Schedule III, as per Companies Act, 2013.


e) Gross Non Performing Assets and Net Non Performing Assets given above includes loans & advances and bonds & debentures.


(a) All quoted investments have been included in 1 day to 30/31 days (one month) bucket considering its liquidity. All unquoted equity shares / warrants including investment in subsidiaries have been included in ''''Over 5 years''''. The maturity pattern has been prepared in line with various regulations issued by RBI from time to time, best practices and based upon best estimate of the management with regard to the timing of various cash flows.


(b) The classification of Assets and Liabilities into current and non-current is carried out based on their residual maturity profile as per requirement of Schedule III to the Companies Act, 2013. The above maturity pattern of assets and liabilities has been prepared by the Company after taking into consideration guidelines for assets-liabilities management (ALM) system as per CIC directions issued by RBI, best practices and best estimate of the Assets-Liability Committee / management with regard to the timing of various cash flows, which has been relied upon by the auditors.


(c) Assets does not include Cash and Bank Balances amounting to Rs, 4 211 crore (Previous year Rs, 1 670 crore).


(iii) Business Transfer Agreement


In terms of Business Transfer Agreement (BTA) dated April 26, 2010, further amended on January 31, 2011 with its subsidiary company i.e. Reliance Home Finance Limited the Company hold loan assets of Rs, 3 crore (Previous year Rs, 5 crore) related to Reliance Home Finance Limited in the trust capacity as on March 31, 2017.


Figures in bracket indicate previous year figures.


11. Corporate Social Responsibility Expenditure


As per Section 135 of the Companies Act, 2013 the Company is under obligation to incur Rs, 13 crore (Previous year Rs, 10 crore) and has incurred the same in cash, being 2% of the average net profit during the three immediately preceding financial years, calculated in the manner as stated in the Act towards Corporate Social Responsibility through a non-profit centre engaged in the provision of health care for the purpose other than construction / acquisition of asset.


12. Remittance in foreign currency on account of dividend


The Company has paid dividend in respect of shares held by non residents on repatriation basis. This, inter-alia, includes portfolio investment, where the amount is also credited to Non Resident External Account (NRE A/c). The total amount remittable in this respect is specified below:


13. During the year, the Company had no specified bank notes or no other denomination note as defined in the MCA notification


G.S.R. 308(E) dated March 30, 2017 and there were no transaction during the period from November 8, 2016 to December 30, 2016.


14. During the year ended March 31, 2017, the Company has changed its basis for determining the provision for diminution in value of investments other than temporary on long term quoted investments. As a result of such change, the charge in the statement of profit & loss for provision for diminution in value of investments for the year ended March 31, 2017, is lower by Rs, 33 crore.


15. The Company has a process whereby periodically all long term contracts (including derivative contracts) are assessed for material foreseeable losses. At the year end, the Company has reviewed and ensured that adequate provision as required under any law / accounting standards there are no foreseeable losses on such long term contracts (including derivative contracts) has been made in the books of account.


16. In the opinion of management, all the assets other than fixed assets and noncurrent investments are approximately of the value stated if realized in the ordinary course of business.

CIN: U67190WB2003PTC096617. Trading in Commodities is done through our Group Company Dynamic Commodities Pvt. Ltd. The company is also engaged in Proprietory Trading apart from Client Business.
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Disclaimer: There is no guarantee of profits or no exceptions from losses. The investment advice provided are solely the personal views of the research team. You are advised to rely on your own judgment while making investment / Trading decisions. Past performance is not an indicator of future returns. Investment is subject to market risks. You should read and understand the Risk Disclosure Documents before trading/Investing.

Disclosure: We, Dynamic Equities Private Limited are also engaged in Proprietory Trading apart from Client Business. In case of any complaints/grievances, clients may write to us at compliance@dynamiclevels.com

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