DIRECTORS’ REPORT
The Members,
Religare Capital Markets Limited
Your Directors have pleasure in presenting the 8
th
Annual Report along with the Audited Accounts of the
Company for the year ended March 31, 2014.
FINANCIAL RESULTS (STANDALONE)
Particulars
Financial Year Ended
March 31, 2014
Amount
(Rs. in million)
Financial Year Ended
March 31, 2013
Amount
( Rs. in million)
Total Income
878.57
827.83
Total Expenditure
2,660.88
10,184.80
Profit/(Loss) Before Tax
(1,782.31)
(9,356.97)
Provision for Tax
- Current Tax
- Deferred Tax (Net)
- Short provision for earlier years
- Fringe Benefit Tax
39.71
(39.71)
-
Profit/(Loss) After Tax
(1,782.31)
(9,356.97)
Balance Brought Forward from previous year
(14,018.51)
(4,661.54)
Profit/(Loss) After Tax
(Carried to Balance Sheet)
(15,800.81)
(14,018.51)
FINANCIAL PERFORMANCE OF THE COMPANY
The last financial year 2014 was marked by periods of economic uncertainty in India as well as around the
world. As the capital markets are very highly correlated to economic outlook, this uncertainty had an adverse
impact on our financial performance for the year. However, to ensure that the long-term interests of the
company are safeguarded, we continued to invest in building out the business, which is reflected as higher
expenditure. Total income of the Company for the year increased to Rs. 878.57 million from Rs. 827.83 in
fiscal 2012-13. The loss after tax for the year is Rs. 1,782.31 million as against Rs. 9,356.97 million in the
earlier year. Your company is committed to revive the financial performance of the Company in years to
come.
EMERGING MARKETS CAPITAL MARKETS BUSINESS
During the financial year 2013-14, Religare Capital Markets (RCM) was instrumental in assisting Crompton
Greaves Ltd. in conducting a successful buy-back of their Equity shares from the open market. RCM was also
Joint Lead Manager on the INR 4.1 Billion rights issue of Kesoram Industries, a flagship company of the B.K.
Birla Group. During the year, RCM also partnered with Religare Finvest Limited for potential opportunities in
structured finance leveraging their strong promoter networks in real estate and harnessing synergies across
the two 2 businesses. RCM was the sole arranger on a number of notable transactions during the year, some
of which were for BSCPL Infrastructure, Phoenix Living Spaces, J.M. Housing Limited and Bagadia Properties
Limited.
On the global front, RCM executed a large number of ECM and Advisory mandates in the ASEAN region
through cutting edge idea generation, strong global distribution and seamless execution despite challenging
markets. It was also the year where the RCM franchise expanded in a steadfast manner in the region with
many firsts in markets such as Indonesia and Malaysia. In April 2013, RCM acted as Joint Placement agent for
a Singapore Dollars (S$) 110 million primary placement for AIMS AMP Capital Industrial REIT a manager of
26 high-quality industrial properties in Singapore and Australia. In less than 9 Months of this transaction,
RCM was appointed by AIMS AMP Capital as Bookrunner and underwriter for a S$100 million rights issue. In
May 2013, RCM was appointed Exclusive Financial Advisor to the shareholders of Star Asia, a leading Asian
fragrance and personal care distributor that was being acquired by Coty Inc. The transaction represents
RCM's first advisory deal for 2013 and first transaction in ASEAN's booming consumer products sector. The
deal was highly complex, involving significant restructuring of StarAsia Group, including the buying out of
minority shareholders in 6 subsidiaries. RCM's involvement delivered significant value to the shareholders of
StarAsia Group, including an increase of more than 30% in the consideration received. In August 2013, as
co-manager and sub-underwriter, RCM successfully listed a S$501m Initial Public Offering of Soilbuild Business
Space REIT (“SB REIT”) – a real estate investment trust investing in a portfolio of income-producing real
estate used primarily for business space purposes in Singapore as well as real estate-related assets. In
September 2013, RCM as Sole Placement Agent, successfully launched and priced a US$38.2m secondary
share offering for PT Sentul City Tbk – a reputable Indonesian real estate developer with the largest effective
land bank in Greater Jakarta. The deal represents RCM’s 1st ECM deal in Indonesia. In October 2013, Religare
as Joint Placement Agent, successfully priced a US$19mn secondary share offering for Tune Ins Holdings
Berhad – a composite insurer that underwrites both general and life insurance products across the Asia
Pacific region. The deal is Religare’s inaugural franchise ECM deal in Malaysia. In October 2013, RCM as Joint
Global Coordinator, International Bookrunner, International Lead Manager and Special Adviser to the
Chairman and CEO of Travellers International Hotel Group, Inc. successfully priced the international offer
tranche of the company’s US$474m primary share offering. This was the largest gaming IPO in the region and
the largest in the Philippines during 2013. RCM was one among 4 banks including CIMB, Maybank and UBS.
SUBSIDIARIES
MANAGEMENT BUYOUT OF OVERSEAS SUBSIDIARIES
In the Management Buyout (MBO) process, the remaining 30% stake in Noah Capital Markets (Pty) Limited,
South Africa ("Noah") and in Noah Capital Markets (EMEA) Limited, UK (“NCM EMEA”) has been sold by
Religare Capital Markets (Europe) Limited, in UK(‘RCME’), to NCM Limited, a company incorporated in Jersey
on 30 August 2013. Further, RCME has also sold 100% stake in Religare Capital Markets Pty Limited
(‘RCMPTY’) to NCM Limited on 10 October 2013.
Pursuant to above, Noah, NCMEMEA (including its subsidiary Noah Nominees (Pty) Limited) and RCMPTY
(“MBO Companies”) have ceased to be subsidiaries of RCME and the Company and has become wholly owned
subsidiary of NCM Limited w.e.f. 30 August 2013. The Company is holding minority stake of 30% in MBO
Companies.
SIMPLIFICATION OF CORPORATE STRUCTURE
In past couple of years, the Company has been focusing its attention to streamline its corporate structure of
its subsidiaries. As a step towards this direction, the Company has identified subsidiaries which are dormant
and non-operating and are required to be dissolved so as to focus on the active and operating. These dormant
and non-operating subsidiaries were either acquired being existing subsidiaries of operating companies or
set-up by overseas subsidiaries in which no business activities were preceded. During the financial year
2013-14 and as on date of this report, 3 subsidiaries have been dissolved.
With an objective of all regulated and operating companies be held directly by Religare Capital Markets
International (Mauritius) Limited [‘RCMIML’] and closing all non-operating and regulated subsidiaries, during
the reporting period, Tobler UK Limited, a UK based subsidiary which was wholly owned subsidiary of Tobler
(Mauritius) Limited (‘TML’) became direct subsidiary of RCMIML w.e.f 04 June 2014 by way of transfer made
by TML.
Further, Religare Capital Markets International (UK) Limited and Religare Investment Holding (UK) Limited
have applied for voluntary in liquidation under the laws of the land w.e.f. 31 March 2014 and 07 March 2014,
respectively.
FUTURE OUTLOOK
The business remains focused on increasing buoyancy in revenues both on the international and India
platforms. In India, as economic tail winds drive capital markets to new highs, the business is targeting
operating break even through several initiatives including expanding presence in US and European Markets.
Internationally, the business is committed to expanding the ASEAN franchise. Several first in markets such as
Malaysia and Indonesia during 2013 were the stepping stones for a larger strategy to build the RCM franchise
through joint ventures and partnerships with local players. Several of these are currently in discussion stage
and we expect that these would come to fruition in financial year 2015. The business will also invest in
building advisory capability to leverage cross border opportunity between ASEAN and the Middle East. Cost
control remains robust as the lean infrastructure and variable compensation model ensure that there is
ample operating leverage in the business.
DIVIDEND
Considering the accumulated losses in last couple of financial years and the need of deployment of funds out
of profit of the Company during the year, the Directors of the Company do not recommend any dividend for
the year.
FIXED DESPOSITS
The Company has neither invited nor accepted any deposits from public within the meaning of Section 58A of
the Companies Act, 1956 read with Companies (Acceptance of Deposit) Rules, 1975 and Section 73-76 of the
Companies Act, 2013 read with Companies (Acceptance of Deposit) Rules, 2014 during the period under
review.
CHANGES IN THE CAPITAL STRUCTURE
During the period under review the following changes took place in shareholding pattern of the Company:
A. Authorised Share Capital:
During the year under review, there was no change in the authorised share capital of the Company.
B. Paid up Share Capital:
The paid up share capital of the Company as on 31 March 2014 was increased from Rs. 1000.87 Cr. to Rs.
1082.43 Cr.
Further, post 31 March 2014, the paid-up shares capital of the Company has been further increased from
Rs.1082.43 Cr. to 10082.56 Cr. by allotment of 13,00,000, 0.01% Non-Convertible Non-Cumulative
Redeemable Preference Shares to RHC Holding Private Limited on 25 April 2014.
INTERNAL AUDITOR
During the financial year 2013-14, term of appointment of M/s Grand Thornton (‘GT’) was due for renewal
and it was decided by the management to appoint M/s KPMG in place of GT. Accordingly, M/s KPMG was
appointed as the Internal Auditors of the Company to conduct the internal audit functions of the Company
w.e.f. October 01, 2013 until 31 March 2015.
INTERNAL CONTROL SYSTEM
The Company is following an effective internal control system commensurate with its size and operations. In
addition to this the work process is designed in such a way that process of internal check is ensured at all
levels.
DIRECTORS
Under the period of review, there was no change in Directors of the Company.
In terms of Section 152 of the Companies Act, 2013 (Act), Mr. Brian Tempest and Mr. Mark Runacres, the
Directors of the Company, are liable to retire by rotation at the ensuing Annual General Meeting and being
eligible, and being eligible have offered themselves for re-appointment.
As per section 149 of the Act and the rules made thereunder, which came into effect from 01 April 2014, the
Company is required to have at least two directors as Independent Directors within one year from the date of
commencement of the provision i.e. upto 31 March 2015. In accordance with the provisions of section 149 of
the Act, such Directors being appointed as Independent Directors to hold office as per their tenure of
appointment mentioned in the Notice of the forthcoming Annual General Meeting (AGM) of the Company.
The Company has received declarations from the Independent Director of the Company confirming that they
meet with the criteria of independence as prescribed both under sub-section (6) of Section 149 of the
Companies Act, 2013.
COMMITTEES OF THE BOARD
Audit Committee
The Audit Committee comprises of Mr. Padam Bahl (as Chairman), Mr. Anil Panwar and Mr. Brian Tempest, as
members and Mr. Gopalan S, Mr. Chris Holland and Mr. Davinder Narang as permanent invitees.
Nomination and Remuneration Committee
The Remuneration/Compensation Committee was renamed as Nomination and Remuneration Committee
(‘the Committee’) w.e.f. May 26, 2014.
The Committee comprises of Mr. Padam Bahl (as Chairman), Mr. Mark Runacres, Mr. Anil Saxena and Mr. Anil
Panwar as members and Mr. Kamlesh Dangi as permanent invitee.
Risk Committee
The Risk Committee comprises of Mr. Brian Tempest (as Chairman), and Mr. Shachindra Nath and Mr. Anil
Saxena, as Members of the Committee.
Share Allotment Committee
The Share Allotment Committee comprises of Mr. Shachindra Nath (as Chairman), Mr. Anil Saxena and Mr.
Anil Panwar as members and Mr. Davinder Narang as permanent invitees.
Loan/Investment and Borrowing Committee
The Loan/Investment and Borrowing Committee comprises of Mr. Anil Panwar (Chairman), Mr. Shachindra
Nath (as Chairman), Mr. Anil Saxena as members and Mr. Sunil Kumar Garg and Mr. Davinder Narang as
permanent invitees
In accordance with the requirement of Section 135 of the Companies Act, 2013 read with Companies
(Corporate Social Responsibility) Rules, 2014, the Board in its meeting held on May 26, 2014 constituted the
Corporate Social Responsibility Committee which comprises of Mr. Shachindra Nath (as Chairman), Mr. Anil
Saxena and Mr. Padam Bahl as Members.
Executive Committee
The Executive Committee of the Company has been dissolved w.e.f. 19 June 2013.
DEMATERIALISATION OF SHARES
Equity Shares
:
Your Company, for the convenience of its shareholders, has its Equity Shares available for dematerialization
and 99.99% of the present paid up equity capital of the Company is in demat mode.
Preference Shares:
The Preference Shares of the Company are also in demat form.
REGISTRAR AND SHARE TRANSFER AGENT
M/s Karvy Computershare Private Limited having its Office at Plot No. 17 to 24, Vithalrao Nagar, Madhapur,
Hyderabad – 500 081, acts as the Registrar and Share Transfer Agent of the Company.
AUDITORS AND AUDITORS REPORT
M/s S.S. Kothari Mehta & Co., Chartered Accountants, who are the statutory auditors of the Company, hold
office till the conclusion of the forthcoming AGM and are eligible for re-appointment. The Company has
received letters from them to the effect that their re-appointment, if made, would be within the prescribed
limits under Section 141(3)(g) of the Companies Act, 2013 and that they are not disqualified for
re-appointment. Pursuant to the provisions of Section 139 of the Companies Act, 2013 and the Rules framed
thereunder, it is proposed to appoint M/s M/s S.S. Kothari Mehta & Co. as statutory auditors of the Company
from the conclusion of the forthcoming AGM till the conclusion of the AGM to be held in the year 2017, subject
to ratification of their appointment at every AGM.
The observations of the Auditors in their report read together with the Notes on Accounts are
self-explanatory and therefore, in the opinion of the Directors, do not call for any further explanation.
It was noted that the accumulated losses of the Company exceeded fifty percent of its net worth as at 31
March 2014 and it has incurred cash losses in the financial year 2013-14 and has also incurred cash losses in
the immediately preceding financial year.
DIRECTOR’S RESPONSIBILITY STATEMENT
Pursuant to Section 217 (2AA) of the Companies Act, 1956, with respect to the Directors’ Responsibility
Statement, it is hereby confirmed that:
(i)
in the preparation of the annual accounts for the financial year ended 31 March 2014, the applicable
accounting standards have been followed along with proper explanation relating to material
departures;
(ii)
the Directors have selected such accounting policies and applied them consistently and made
state of affairs of the Company as at 31 March 2014, and of the loss of the Company for the said
period;
(iii)
the Directors have taken proper and sufficient care for the maintenance of adequate accounting
records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of
the Company and for preventing and detecting fraud and other irregularities;
(iv)
the Directors have prepared the accounts for the financial year ended 31 March 2014 on going
concern basis.
CONSERVATION OF ENERGY AND TECHNOLOGY ABSORPTION
The Company is not engaged in manufacturing activities and, therefore, the particulars as required under
Section 217(1) (e) of the Companies Act, 1956 read with Companies (Disclosures of Particulars in the Report
of the Board of Directors) Rules, 1988 regarding Conservation of Energy, Research and Development and
Technology Absorption are not applicable.
FOREIGN EXCHANGE EARNINGS AND OUTGO
The Company has continued to maintain focus and avail of export opportunities based on economic
considerations. During the year, foreign exchange income or expenses of the Company is as under:
Earnings
:
Rs. 364.39 million
Outgo
:
Rs. 32.89 million
PARTICULARS OF EMPLOYEES
In terms of the provisions of Section 217(2A) of the Companies Act, 1956 read with the Companies
(Particulars of Employees) Rules, 1975 and the Companies (Particulars of Employees) Amendment Rules,
2011, the statement of particulars of employees shall form part of the Directors’ Report.
However, having regard to the provisions of Section 219(1)(b)(iv) of the Companies Act, 1956 this Report and
Accounts are being sent to all the Shareholders excluding the Statement of particulars of employees under
Section 217(2A) of the Act. Any member interested in obtaining a copy of the statement may write to the
Company Secretary at the Registered Office of the Company.
ACKNOWLEDGEMENTS
The continued cooperation and assistance of all constituents of the business is appreciated and accordingly
your Directors would like to express their sincere appreciation of the co-operation and assistance received
from Bankers, Regulatory Bodies, Investors, Clients, Suppliers, Distributors, Customers and other
stakeholders during the year under review.
Your Directors also wish to place on record their deep sense of appreciation for the commitment displayed by
all executives, officers and staff, resulting in the successful performance during the year.
By order of the Board of Directors
For Religare Capital Markets Limited
Sd/-
Sd/-
Place: New Delhi
Shachindra Nath Anil Saxena
Dated: 17 September 2014
Director
Director
Independent Auditors’ Report
To The Members of Religare Capital Markets Limited
Report On the Financial Statements
We have audited the accompanying Financial Statements of Religare Capital Markets Limited (“the Company”)
which comprises the Balance Sheet as at 31
st
March, 2014, and the Statement of Profit and Loss and the Cash
Flow Statement for the year then ended, and Notes to the Financial Statements comprising of a summary of
significant accounting policies and other explanatory information.
Management’s Responsibility for the Financial Statements
Management is responsible for the preparation of these financial statements that give a true and fair view of
the financial position, financial performance and cash flows of the Company in accordance with the Accounting
Standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956 (‘the Act’) read with the
General Circular 15/2013 dated 13
th
September, 2013 of the Ministry of Corporate Affairs in respect of section
133 of the Companies Act, 2013. This responsibility includes the design, implementation, and maintenance of
internal controls relevant to the preparation and presentation of the financial statements that give a true and
fair view and are free from material misstatements, whether due to fraud or error.
Auditor’s Responsibility
Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our
audit in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India.
Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the
financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of
the risks of the material misstatement of the financial statements, whether due to error or fraud. In making
those risk assessments, the auditor considers internal control relevant to the Company’s preparation and fair
presentation of the financial statements in order to design audit procedures that are appropriate in the
circumstances but not for the purpose of expressing an opinion on the effectiveness of entity’s internal
control. An audit also includes evaluating the appropriateness of accounting policies used and reasonableness
of the accounting estimates made by management, as well as evaluating the overall presentation of the
financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
audit opinion.
Opinion
In our opinion and to the best of our information and according to the explanations given to us, the said
accounts give the information required by the Companies Act, 1956, in the manner so required and give a true
and fair view in conformity with the accounting principles generally accepted in India:
i)
In the case of the Balance Sheet, of the state of affairs of the Company as at 31st March, 2014;
ii)
In the case of Statement of Profit and Loss, of the loss of the Company for the year ended on that
date; and
iii)
In the case of the Cash Flow Statement, of the cash flows for the year ended on that date.
Report on Other Legal and Regulatory Requirements
1.
As required by the Companies (Auditor's Report) Order, 2003 ('the Order') issued by the Central
Government of India in terms of section 227 of the Act, we give in the Annexure a statement on the
matters specified in paragraphs 4 and 5 of the Order;
2.
As required by section 227(3) of the Act, we report that:
a.
We have obtained all the information and explanations which to the best of our knowledge
and belief were necessary for the purpose of our audit;
b.
In our opinion proper books of account as required by law have been kept by the Company
so far as appears from our examination of those books;
c.
The Balance Sheet, Statement of Profit and Loss and Cash Flow Statement dealt with by this
Report are in agreement with the books of account;
d.
In our opinion, the Balance Sheet, Statement of Profit and Loss and Cash Flow Statement
comply with the Accounting Standards referred to in sub-section (3C) of section 211 of the
Companies Act, 1956, read with the General circular 15/2013 dated 13
th
September, 2013
of the Ministry of Corporate Affairs in respect of section 133 of the Companies Act, 2013,
e.
On the basis of written representations received from the directors as on 31 March 2014,
and taken on record by the Board of Directors, none of the directors is disqualified as on
31 March 2014, from being appointed as a director in terms of clause (g) of sub-section (1)
of section 274 of the Companies Act, 1956.
For S.S. KOTHARI MEHTA & CO
Chartered Accountants
Firm Registration No.; 000756N
Sd/-
K K Tulshan
Partner
Membership No. 085033
Place: New Delhi
Annexure to Auditor’s Report
Referred to in paragraph of ‘Report on Other Legal and Regulatory Requirements’ of the Auditor’s Report of
even date to the members of Religare Capital Markets Limited on the financial statements as of and for the
year ended March 31, 2014.
(i) (a) The Company is maintaining proper records showing full particulars, including quantitative details and
situation, of fixed assets.
(b) The Company has a phased program of physical verification of its fixed assets which, in our opinion, is
reasonable having regard to the size of the Company and the nature of its assets. As part of this
program, the management has physically verified certain fixed assets during the year. Discrepancies
noticed on such verification as compared to book records were not material and have been properly
adjusted in the books of account.
(c) In our opinion and according to the information and explanations given to us, no substantial part of
fixed assets has not been disposed of by the Company during the year impacting the going concern
concept.
(ii)
The Company did not have any inventory during the year. Accordingly, Clause 4(ii) (a) to (ii) (c) of
paragraph 4 of the Order regarding physical verification of inventory and maintenance of proper
records of inventory are not applicable to the Company for the current year.
(iii) (a)
The Company has not granted any loans, secured or unsecured, to companies, firms or other parties
covered in the register maintained under section 301 of the Act. Therefore the provisions of Clause
4(iii) [(b), (c) and (d)] of paragraph 4 of the Order are not applicable to the Company.
(b) The Company had taken loan from Five companies (including 2 companies from whom loan was
outstanding at the beginning of the year) covered in the register maintained under section 301 of the
Companies Act 1956. The maximum amount involved during the year was Rs. 38,50,00,000 and the
year-end balance of loans taken from such party was Rs. 1,50,00,000.
(c) In our opinion, the rate of interest & other terms and conditions on which loans have been taken from
companies listed in the register maintained under section 301 of the Companies Act, 1956 are not,
prima facie, prejudicial to the interest of the company.
(d) The Company is regular in repaying the principal amounts as stipulated and has been regular in the
payment of interest.
(iv)
In our opinion and according to the information and explanations given to us, there is an adequate
internal control system commensurate with the size of the Company and the nature of its business for
the purchase of fixed assets and for the sale of services
.
Further, on the basis of our examination of
the books and records of the Company, and according to the information and explanations given to
us, we have neither come across, nor have been informed of, any continuing failure to correct major
weaknesses in the aforesaid internal control system.
(v) (a)
According to the information and explanations given to us, we are of the opinion that the particulars
of the all contracts and arrangement that need to be entered into the register maintained under
section 301 of the Companies Act ,1956 have been so entered.
(b)
In our opinion and according to the information and explanations given to us, the transaction made in
pursuance of contracts or arrangements entered in the register maintained under section 301 of the
companies Act,1956 and exceeding the value of rupees five lakhs in respect of any party during the
year have been made at prices which are reasonable having regard to prevailing market price at the
relevant time.
(vi)
The Company has not accepted any deposits from the public within the meaning of sections 58A and
58AA of the Act and the rules framed thereunder.
(vii)
In our opinion, the Company has an internal audit system commensurate with the size and nature of
business of the Company.
(viii)
The Central Government of India has not prescribed the maintenance of cost records under clause (d)
of sub-section (1) of section 209 of the Act for any of the products of the Company.
(ix) (a) According to the information and explanations given to us and the records of the Company examined
by us, in our opinion, the Company is generally regular in depositing the undisputed statutory dues,
including provident fund, investor education and protection fund, employees’ state insurance, income
tax, sales tax, wealth tax, service tax, customs duty, excise duty, cess and other material statutory
dues, as applicable, with the appropriate authorities.
(b) According to the information and explanations given to us and the records of the Company examined
by us, the particulars of dues of income tax, sales tax, custom duty, wealth tax, excise duty, service tax
as at March 31, 2014 which have not been deposited on account of any dispute, are as follows: -
Name of
the Statute
Nature of Dues
Amount (Rs)
Period to which
the amount
relates
Forum where the
dispute is pending
Income Tax
Act, 1961
Income Tax Demands
(TDS related)
516,360
A.Y. 2008-09
Commissioner
of
Income Tax (Appeals)
Income Tax
Act, 1961
Based on Transfer
Pricing
Order
U/s
92CA(3) of the Act
24,754,090
A.Y. 2009-10
Income Tax Appellate
Tribunal
Income Tax
Act, 1961
Based on Transfer
Pricing
Order
U/s
92CA(3) of the Act
74,060,295
A.Y. 2010-11
Dispute
Resolution
Panel
Service tax
Based
on
Special
Audit appointed U/s
72A of the Finance
Act, 1994 by CST, New
Delhi
51,250,094
A.Y 2008-09 to
2012-13
Commissioner
of
Service tax
Total
150,580,839
(x)
The accumulated losses of the Company exceeded fifty percent of its net worth as at March 31, 2014
and it has incurred cash losses in the financial year ended on that date and has also incurred cash
losses in the immediately preceding financial year.
(xi)
The Company has not defaulted in repayment of dues to the Bank. The Company has no borrowings
from financial institutions or debenture holders.
(xii)
The Company has not granted any loans and advances on the basis of security by way of pledge of
shares, debentures and other securities.
(xiii)
The provisions of any special statute applicable to chit fund/ nidhi / mutual benefit fund/ societies are
not applicable to the Company.
(xiv)
In our opinion, the Company has maintained proper records of transactions and contracts relating to
dealing or trading in shares, securities, debentures and other investments during the year and timely
entries have been made therein. Further, such securities have been held by the Company in its own
name or are in process of transfer in its name, except (a) to the extent of the exemption granted
under section 49 of the Act and (b) current investments in Ligare Voyages Limited that has been sold
during the reporting period.
(xv)
In our opinion, and according to the information and explanations given to us, the terms and
conditions of the guarantees given by the Company, for loans taken by others from banks of financial
institutions, are not prejudicial to the interest of the Company.
(xvi)
The Company has not obtained any term loans.
(xvii)
On the basis of an overall examination of the Company, in our opinion, and according to the
information and explanations given to us, there are no funds raised on a short-term basis which have
been used for long-term investment.
(xviii)
According to the information and explanations given to us, The Company has made preferential
allotment of shares to parties and companies covered in the register maintained under section 301 of
the Act during the year. In our opinion the price at which shares have been issued is not prejudicial to
the interest of the company.
(xix)
The Company has not issued any debentures during the year and does not have any debentures
outstanding as at the beginning of the year and at the year end. Accordingly, the provisions of Clause
4(xix) of the Order are not applicable to the Company.
(xx)
The Company has not raised any money by public issue during the year.
(xxi)
During the course of our examination of the books and records of the Company, carried out in
accordance with the generally accepted auditing practices in India, and according to the information
and explanations given to us, we have neither come across any instance of fraud on or by the
Company, noticed or reported during the year, nor have we been informed of such case by the
management.
For S.S. KOTHARI MEHTA & CO
Chartered Accountants
Firm Registration No.; 000756N
Sd/-
K K Tulshan
Partner
Membership No. 085033
Place: New Delhi
RELIGARE CAPITAL MARKETS LIMITED
STATEMENT OF PROFIT & LOSS, STATEMENT OF CASH FLOWS AND BALANCE SHEET ALONG WITH NOTES FORMING
PART OF THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED MARCH 31, 2014
S. No. Particulars
1
Overview and Significant Accounting Policies
2
Share Capital
3
Reserves and Surplus
4
Other Long - Term Liabilities
5
Long - Term Provisions
6
Short - Term Borrowings
7
Trade Payables
8
Other Current Liabilities
9
Short - Term Provisions
10
Tangible Fixed Assets
11
Intangible Fixed Assets
12
Intangible Fixed Assets under development
13
Non - Current Investments
14
Long - Term Loans and Advances
15
Other Non - Current Assets
16
Current Investments
17
Trade Receivables
18
Cash and Bank Balances
19
Short - term Loans and Advances
20
Other Current Assets
21
Contingent Liabilities
22
Revenue from Operations
23
Other Income
24
Employee Benefit Expenses
25
Finance Costs
26
Depreciation and Amortization expense
27
Other Expenses
28
Tax Expense
29
Earnings per Equity Shares
30
Expenditure in Foreign Currency
31
Earnings in Foreign Currency
32
Provision against Doubtful Debts
33
Employee Benefits - Gratuity and Leave Encashment
34
Segment Reporting
35
Related Party Disclosures
36
Borrowing Costs
37
Leases
38
Other Notes
39
Previous Year figures
40
Additional Information
Note No.
As at
March 31, 2014
As at
March 31, 2013
Amount (Rs.)
Amount (Rs.)
EQUITY AND LIABILITIES
Shareholders' Funds
Share Capital
2
10,824,300,000 10,008,700,000
Reserves and Surplus
3
(3,479,696,624) (2,647,789,333)
Non - Current Liabilities
Other Long Term Liabilities
4
1,156,840 5,721,368
Long - Term Provisions
5
4,543,713 6,481,841
Current Liabilities
Short - Term Borrowings
6
616,318,106 627,697,790
Trade Payables
7
20,473,367 12,881,513
Other Current Liabilities
8
156,729,264 371,338,250
Short - Term Provisions
9
8,434,000 8,120,340
TOTAL
8,152,258,666 8,393,151,769
ASSETS
Non - Current Assets
Fixed Assets
Tangible Assets
10
42,521,249 66,302,806
Intangible Assets
11
4,812,469 5,255,307
Intangible Assets under development
12
- 14,153,073
Non - Current Investments
13
7,094,093,305 5,975,767,580
Long - Term Loans and Advances
14
182,268,557 160,113,622
Other Non - Current Assets
15
- 5,000,000
Current Assets
Current investments
16
- 900,000,000
Trade Receivables
17
25,465,778 19,238,384
Cash and Bank Balances
18
707,380,771 1,090,600,438
Short - Term Loans and Advances
19
55,731,718 79,797,078
Other Current Assets
20
39,984,818 76,923,481
TOTAL
8,152,258,666 8,393,151,769
Overview and Significant Accounting Policies
1
The Notes are an integral part of the Financial Statements
This is the Balance Sheet referred to in our report of even date.
For and on behalf of the Board of Directors
For S.S. Kothari Mehta & Co.
Firm Registration Number: 000756N
Chartered Accountants
K.K. Tulshan
SHACHINDRA NATH
ANIL SAXENA
Partner
Director
Director
Membership Number: 085033
(DIN:00510618)
(DIN:01555425)
Place : New Delhi
Place : New Delhi
Date :
Date :
RELIGARE CAPITAL MARKETS LIMITED
BALANCE SHEET FOR THE YEAR ENDED MARCH 31, 2014
SATISH KUMAR NIRANKAR
Company Secretary
Particulars
DAVINDER NARANG
Director - Finance
Sd/-
Sd/-26 May 2014
26 May 2014
Note No.
Year Ended
March 31, 2014
Year Ended
March 31, 2013
Amount (Rs.)
Amount (Rs.)
Revenue
Revenue from Operations
22
848,503,102 798,911,740
Other Income
23
30,065,041 28,915,813
Total Revenue
878,568,143 827,827,553
Expenses
Employee Benefits Expense
24
276,038,130 551,710,640
Finance Costs
25
74,277,248 537,156,320
Depreciation and Amortization Expenses
26
14,115,666 22,254,520
Other Expenses
27
296,444,390 280,618,014
Total Expenses
660,875,434 1,391,739,494
Profit / (Loss) Before Exceptional Items and Tax
217,692,709 (563,911,941)
Exceptional Items
(2,000,000,000) (8,650,000,000)
Loss on Account of Error Trades {Refer note 38(g)}
- (119,689,534)
Loss on Sale /Write off of Fixed Assets {Refer note 38(f)}
- (23,366,405)
Total Exceptional Items
(2,000,000,000) (8,793,055,939)
Profit / (Loss) After Exceptional Items and Before Tax
(1,782,307,291) (9,356,967,880)
Tax Expense
Current Tax
28
39,712,171 -
MAT Credit Entitlement
(39,712,171)
Deferred Tax
- -
Total Tax Expense
- -
Profit/(Loss) for the period
(1,782,307,291) (9,356,967,880)
Earnings per equity share
29
Basic
(22.86) (115.26)
Diluted
(22.86) (115.26)
Overview and Significant Accounting Policies
1
The Notes are an integral part of the Financial Statements
This is the Statement of Profit and Loss referred to in our report of even date.
For and on behalf of the Board of Directors
For S.S. Kothari Mehta & Co.
Firm Registration Number: 000756N
Chartered Accountants
K.K. Tulshan
SHACHINDRA NATH
ANIL SAXENA
Partner
Director
Director
Membership Number: 085033
(DIN:00510618)
(DIN:01555425)
Place : New Delhi
Place : New Delhi
Date :
Date :
STATEMENT OF PROFIT AND LOSS FOR THE YEAR ENDED MARCH 31, 2014
Particulars
SATISH KUMAR NIRANKAR
Company Secretary
DAVINDER NARANG
Director - Finance
Provision for diminution other than temporary
in the value of long term investment in a
subsidiary company {Refer Note 2.3(d)}
26 May 2014
26 May 2014
Sd/-
Sd/-
Sd/-For the year ended
March 31, 2014
For the year ended March
31, 2013
Amount (Rs.)
Amount (Rs.)
A.
Cash flow from operating activities:
Net Proft /(Loss) before tax
(1,782,307,291)
(9,356,967,880)
Adjustments for:
Depreciation
14,115,666
22,254,520
Interest Expense
69,270,022
522,473,950
Interest Income
(71,928,884)
(12,130)
Loss on sale of Fixed Assets
2,735,724
24,607,227
Liability no longer required written back
(33)
-Provision for Bad and Doubtful Debts
111,240
-Provision for Gratuity and Leave Encashment
(3,080,753)
2,123,367
Provision for Lease Equalisation
1,456,285
485,428
Provision for Impairment of Investments
2,000,000,000
8,650,000,000
Foreign Exchange (Gain) /Loss (Net)
(3,376,432)
260,661
TDS on technical/service /other operating income
(8,300,004)
(988,065)
Operating Profit/(Loss) before working capital changes
218,695,540
(135,762,922)
Adjustments for changes in working capital :
- (Increase)/Decrease in Sundry Debtors
30,319,406
(30,095,523)
- (Increase)/Decrease in Other Receivables
(8,275,179)
325,010,663
- Increase/(Decrease) in Trade and Other Payables
(199,267,619)
(220,468,218)
Cash generated from/ (used in) operations
41,472,148
(61,316,000)
- Taxes (Paid) / Received (Net of TDS)
(81,020)
843
Net cash generated from/(used in) operating activities (A)
41,391,128
(61,315,157)
B.
Cash flow from investing activities:
Purchase of fixed assets
(2,297,836)
(19,927,513)
Capital Work in Progress
14,153,073
(12,284,462)
Proceeds from Sale of fixed assets
9,648,042
18,076,645
Proceeds from Sale of Investments
900,000,000
-Investment in Subsidiaries
(3,118,325,726)
(8,192,250,275)
Purchase of investments
-
(900,000,000)
Loans/Inter Corporate Deposits given
-
-Loans/ICDs refunds received
-
-Finance Lease Rent Payment (Principal Portion)
Deposits with bank
94,152,564
Interest Received (Revenue)
-
-Dividend Received
-
-Amount Paid on Acquisition
-
-Any other item
Net cash generated from/(used in) investing activities (B)
(2,102,669,883)
(9,106,385,605)
C.
Cash flow from financing activities:
Proceeds from fresh issue of Share Capital (including share application money)
1,766,000,000
9,663,916,164
Proceeds from short term borrowings
15,000,000
6,617,540
Repayment of short term borrowings
(100,207,221)
(6,392,882,991)
Overdraft/Cash Credit
73,827,573
(1,104,553,936)
Interest Paid
(81,561,264)
(701,505,748)
Interest Received (Revenue)
-
12,130
Net cash generated from/(used in) financing activities (C)
1,673,059,088
1,471,603,159
Net Increase in Cash and Cash Equivalents (A)+(B)+(C)
(388,219,667)
(7,696,097,603)
Cash and cash equivalents at the beginning of the year
1,095,600,438
8,791,698,041
Cash and cash equivalents at the end of the period
707,380,771
1,095,600,438
Cash and cash equivalents comprise of
Cash Balance on Hand
45,058
127,497
Fixed Deposits with Scheduled banks (Refer Note 2)
690,900,000
1,052,550,000
Current Accounts with Scheduled banks
16,435,713
42,922,941
Total
707,380,771
1,095,600,438
RELIGARE CAPITAL MARKETS LIMITED
CASH FLOW STATEMENT FOR THE YEAR ENDED MARCH 31, 2014
CASH FLOW STATEMENT FOR THE YEAR ENDED MARCH 31, 2014
Notes:
1
2
3
4
The Notes are an integral part of the Financial Statements
For S.S. Kothari Mehta & Co.
Firm Registration Number: 000756N
Chartered Accountants
K.K. Tulshan
SHACHINDRA NATH
ANIL SAXENA
Partner
Director
Director
Membership Number: 085033
DIN: 00510618
DIN: 01555425
Place : New Delhi
Place : New Delhi
Date :
Date :
Company Secretary
The above Cash Flow Statement has been prepared under the "Indirect Method" as set out in Accounting Standard -3 on Cash Flow
Statements
Fixed Deposits with Scheduled Banks includes Rs. 26,000,000 (previous year Rs. 26,000,000) pledged with National Securities
Clearing Corporation Limited and Bombay Stock Exchange towards the base capital requirements of the Stock Exchanges, Rs.
414,900,000 (previous year Rs.414,900,000) towards overdraft facility, Rs. NIL (previous year Rs. 361,650,000) towards Stand by
Letter of Credit facility and Guarantee on loan from ICICI Bank UK, in Religare Capital Markets International (UK) Limited, a sub
subsidiary of the company and Rs. 250,000,000 (previous year 250,000,000) pledged with Axis Bank against Bank Guarantee given
to National Stock Exchange of India Limited.
Figures in brackets indicate cash outgo.
This is the Cash Flow Statement referred to in our report of even date.
SATISH KUMAR NIRANKAR
DAVINDER NARANG
Director - Finance
For and on behalf of the Board of Directors
Previous year figures have been regrouped and rearranged wherever necessary to confirm to current year's classification.
Sd/-
Sd/-
Sd/-26 May 2014
26 May 2014
1
OVERVIEW AND SIGNIFICANT ACCOUNTING POLICIES
1.1 OVERVIEW
1.2 SIGNIFICANT ACCOUNTING POLICIES
a) BASIS OF ACCOUNTING
b) USE OF ESTIMATES
c) REVENUE RECOGNITION
(i)
(ii)
(iii)
(iv)
d) FIXED ASSETS
Fixed assets are stated at cost less accumulated depreciation. Cost for this purpose includes purchase price, non refundable taxes or levies and other directly attributable costs of
bringing the asset to its working condition for its intended use.
Income from Corporate Advisory, Syndication Fees, Consultancy and Underwriting fees is recognized on accrual basis based on stage of completion of assignments in
accordance with terms of the relevant agreements.
Revenue from Broking Activities is accounted for on the trade date of transaction.
Interest Income on Fixed Deposits is recognized on an accrual basis.
An asset or a liability is classified as current when it satisfies any of the following criteria:
1. it is expected to be realized / settled, or is intended for sale or consumption, in the Company’s normal operating cycle; or
2. it is held primarily for the purpose of being traded; or
3. it is expected to be realized / due to be settled within twelve months after the reporting date; or
4. it is cash or cash equivalent unless it is restricted from being exchanged or used to settle a liability for at least twelve months after the reporting date; or
5. the Company does not have an unconditional right to defer settlement of the liability for at least twelve months after the reporting date.
All other assets and liabilities are classified as non-current.
RELIGARE CAPITAL MARKETS LIMITED
NOTES FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED MARCH 31, 2014
Religare Capital Markets Limited ("RCML") was incorporated in February' 2007 and obtained licence as a Broker and a full service Investment Banker from Securities and Exchange
Board of India. RCML is a wholly owned subsidiary of Religare Enterprises Limited (REL), an Indian multinational. RCML offers a comprehensive suite of services across Investment
Banking and Institutional Equities. The Investment Banking operations provide Equity Capital Markets, Corporate Finance and Private Financing services to clients worldwide. The
Institutional Equities business specializes in Equity Research, Sales and Execution in emerging market equities. It also have a presence in several emerging markets and in key
international financial centres through subsidiaries in Singapore, Hong Kong and London. In India, RCML offers boutique of Investment Banking services including equities trading
platform to its institutional clients. With a strong Global reach and strong teams of Investment Bankers, Equity Research, RCML is in a position to provide high standards of client
service with a large focus on emerging markets.
Revenue excludes service tax.
The Financial Statements are prepared under the historical cost convention and on accrual basis of accounting and in accordance with generally accepted accounting principles in
India and comply in material aspect with the measurement and recognition principles of Accounting Standards referred to in Section 211 (3C) of the Companies Act, 1956 of India
(the “Act”) read with Companies (Accounting Standards) Rules, 2006 to the extent applicable.
All assets and liabilities have been classified as current or non-current as per the Company’s normal operating cycle and other criteria set out in the Schedule VI to the Companies
Act, 1956. Based on the nature of products and the time between the acquisition of assets for processing and their realisation in cash and cash equivalents, the Company has
ascertained its operating cycle as 12 months for the purpose of current – non current classification of assets and liabilities.
The presentation of Financial Statements requires estimates and assumptions to be made that affect the reported amount of assets and liabilities on the date of financial
statements and the reported amount of revenue and expenses during the reporting period. Difference between the actual results and estimates are recognized in the period in
which results are known / materialized.
NOTES FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED MARCH 31, 2014
e) LEASED ASSETS
(i)
(ii)
f) INTANGIBLE ASSETS
g) DEPRECIATION AND AMORTIZATION
Assets Description Depreciation Rate (%) (put to use upto December 31, 2011)
Depreciation Rate (%) (put to use on or after October 1, 2011)
Computers 16.21% Between 16.21% to 50% Office Equipment Between 10% to 20% Between 10% to 20% Furniture and Fixtures 6.33% 6.33%
Vehicle 9.50% 16.00% Software 9.50% 16.00%
(i)
(ii)
(iii)
4.75% 6.33% 9.50%Transactions in foreign currencies are recorded at the rate of exchange in force at the time of occurrence of the transactions.
Exchange differences arising on settlement of revenue transactions are recognized in the Statement of Profit and Loss.
Monetary items denominated in a foreign currency are restated using the exchange rates prevailing at the date of the Balance Sheet and the resulting net exchange
difference is recognized in the Statement of Profit and Loss.
Individual assets costing upto Rs. 5,000 are fully depreciated in the year of acquisition.
h) INVESTMENTS
Depreciation Rate (%) (As per Schedule XIV of the Companies
Act, 1956)
16.21%
Intangible assets are recognised only if it is probable that the future economic benefits that are attributable to assets will flow to the enterprise and the cost of the assets can be
measured reliably. The intangible assets are recorded at cost and are carried at cost less accumulated depreciation and accumulated impairment losses, if any.
Computer Software which is not an integral part of the related hardware is classified as an intangible asset and is being amortised over the estimated useful life.
Immovable assets at the leased premises including civil works, electrical items are capitalized as leasehold improvements and are amortized over the primary period of lease
subject to maximum of 6 years.
Depreciation on Fixed Assets is provided on Straight Line Method, at the rates specified in Schedule XIV of the Companies Act, 1956 or the rates based on useful lives of the assets
as estimated by the management, whichever is higher. Depreciation is provided for on a pro-rata basis on the assets acquired, sold or disposed off during the year.
Due to pace of change in technology, change in business dynamics and operations forcing the Company to apply new tools and technologies and discard old ones and degrading in
product quality, the Company has decided during the year ended March 31, 2012 to revise estimated life of all assets purchased and put to use after October 1, 2011.
Consequently the rate of depreciation charged on assets are as
under:-Assets acquired under Leases where a significant portion of the risks and rewards of the ownership are retained by the lessor are classified as Operating Leases. The rentals
and all the other expenses of assets under operating lease are treated as revenue expenditure.
Assets given on operating leases are included in fixed assets. Lease income is recognized in the Statement of Profit and Loss on straight line basis over the lease term.
Operating costs of leased assets, including depreciation are recognized as an expense in the Statement of Profit and Loss. Initial direct cost such as legal costs, brokerages etc.
are charged to Statement of Profit and Loss as incurred.
9.50%
