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HATHWAY INVESTMENTS PRIVATE LIMITED


ANNUAL REPORT & ACCOUNTS , 2003-04
. . Directors : ' -

Raj an B.Raheja Chairman Akshay Raheja A. Unnikrishnan Sanjay Johar .


. . Bankers-'

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ICICI Bank Ltd. Vijaya Bank Ltd. HDFC Bank Ltd.

Auditors . G. M. Kapadia & Co.


Registered / Corporate Office :

"RAHEJAS", 4th Floor, Corner of Main Avenue & V. P. Road, Santacruz (W), Mumbai - 400 054.

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HATHWAY INVESTMENTS PRIVATE LIMITED REPORT OF THE BOARD OF DIRECTORS -The Directors have great pleasure in presenting the Tenth Annual Report of your Company for, the year ended March31,2004. / . "' '-'..' \ ; " - _ --"''.' ' ' - -:' '-'"-. Financial Highlights " '= ; . .." . . ;

The financial performance of the^ Company during-the year unde'r review is as unden (a) Operations (Rupees) Year ended Mar 31,2004 12,061,250 25,000 (1,613,444) 3,293362 16,943,056 (433,644,000) (247,835) (416,948,779) 3,339,044 (420,287,823)

Profit / (Loss) Before Taxation Provision for Taxation Provision for Deferred Tax Excess/(Short) provision for taxation written back Profit / (Loss) After Taxation Balance b/f from Previous Year . Add: Prior year's adjustment Transfer to Special Reserve . Balance carried forward (b) Net Worth

(Rupees) Year ended Mar 31, 2003 (29,520,446)' 75,000

(29,595,446) ,(404,313,004) 264.450 (433,644',000) (433^644,000)

(Rupees) , As on Mar 31, 2004 Share Capital Reserves and Surplus Net Worth 100,000,000 1.316.096.637 1,416,096,637

(Rupees) As on Mar 31, 2003 100,000,000 1.299.401.416 1,399,401,416

In connection with the observations made by"the Auditors in their Audit Report, the provisions of the Incometax Act, 1961 contains detailed manner in which profit / loss would be ^determined in case of shares and securities held as stock in trade which.were converted from investment. In such circumstances, the Board of Directors felt prudent to value such shares and securities at the rate at which the same were converted. Demerger The entire Publication Business of-the Company, which includes the Internet Division, was transferred to Outlook Publishing (India) Pvt. Ltd.( 'Outlook' ) as a going concern pursuant to a scheme of demerger in accordance with Section 2(19AA) of the Income Tax Act, 1961. All the liabilities and assets both movable and immovable, tangible and intangible, pertaining to the Publication Business have been transfered to Outlook after necessary approvals with effect from April 1,2002. . . . During the transition period, the Company carried on the aforesaid business activities including all statutory compliances in "trust" in its own name but for and on behalf of OPIPL from the Appointed Date to the Effective Date i:e. August 25, 2003.

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SANSCO SERVICES - Annual Reports Library Services - www.sansc<hnet Dividend . - -ys^ In order to conserve the resources for the" future, your Directors do not recommend any dividend for the year under review. .. . .""..-: - " : . . - , ' '. ' . Subsidiary
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, Particulars as required under Section 212 of the Companies Act, ;1956, in respect of RMC-Readymix (India)-. Pvt. Ltd., have been annexed to the accounts.of the Company. - - - ' Deposit The Company has not accepted any deposits from the public..-.:._ -' . -

Non-Banking Financial Companies Prudential Norms (Reserve Bank) Directions, 1998 ('NBFC. Regulations'/ -" " - ."'-' - ' ' ': "" ". f . I n terms of paragraph,9BB of .the NBFC Regulations, the particulars as applicable, to .the Company, are.. appended to the Balance Sheet. - : " ~ . " " Energy Conservation, Technology Absorption and Foreign Exchange earnings / outgo ..As required under-Section 217(l)(e) of the Companies Act, 1956 read with the Companies (Disclosure of Particulars in the report of the Board of Directors) Rules, 1988 the relevant information pertaining to , conservation of energy, technology .absorption are not applicable to the Company. The Company had no foreign exchange earnings or outgo during"the current year. -'- , " ' * . Particulars o f Employees . - . " . ' "."-."" ,

As required by the provisions of Section 217(2A) of the Companies'-Act, 1956 read with-Companies (Particulars of Employees) Rules, 1975 as amended, the names and/other particulars of employees are set out in the Annexure to the Director's Report. . - ~ " . L " "'. '"-'-..".... Directors''Respbnsibility Statement The' Directors confirm that:"""" . L ;": ' = " ' -

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(a) In preparation of Annual Accounts, the: applicable" accounting, standards has -been followed-except for valuation of certain shares & securities which wefe.held as/Investments and converted'into stock-in-trade in earlier years; ."".'"_. . V ' - ' ' - . = '=. - " -'_ \. . . ---"--" (b) The Directors have selected such accounting policies and applied themL consistently and made judgements and estimates that are reasonable and prudent so as to give true and fair view of the state of affairs of the Company at the end of the-Tinancial year and~ the profit of the Company for that period...

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- -.(c)_ The Directors -have taken proper-and sufficient care in maintaining accounting .records as per the provisions of the Companies Act, 1956 for safeguarding, assets of the'company and for preventing and - - - . . detecting fraud and other irregularities. -: " ' , v "'".'' " (d) Annual Accounts are prepared on the principle of going concern. " . - ".'

Auditors

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The auditors of .the Company, M/s.G. M. Kapadia & Co.; retire at the forthcoming Annual General Meeting and being eligible offer themselves for re-appointment. Your directors-recorhmend'their re-appointment.
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SANSCO SERVICES - Annual Reports Library Services - www.sansco.net Audit Committee -

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The Audit Committee of the Company comprises of three Directors. The.members of the Audit Committee are Mr Akshay Raheja, Mr A Unnikrishnan and Mr Sanjay Johar. During the financial year ended 31st March, 2004 the Audit Committee met twice on 29/09/03 and 05/01/04. . . Acknowledgement The Directors wish to express their deep appreciation to all staff members for their excellent contribution and the sustained support rendered by the banks and financial institutions. On behalf of the Board of Directors

Akshay R Raheja Director

Mumbai Dated: - <J

. A OFD SdOi
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Sanjay Johar Director

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ANNEXURE TO DIRECTOR'S REPORT

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Information under Section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975 and forming part of the Director's Report for the year ended 31st March, 2004 ,

S. No. Name

Gross Remuneration 2,360,538

Designation

Age Qualification

Experience (No. of yrs.)


14

Date of Employment 01.06.2002

Particulars of Last Employment Hathway Cable & Datacom Pvt. Ltd.

Praveen Shrikhande

Manager

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PGDM NT-Bombay (Computer Engg.)

NOTES: 1. Gross remuneration includes Companies contribution to Superannuation Fund, Provident Fund and value of perquisites evaluated as per Income Tax Act, 1961. 2. The above employee is not a relative of any director of the Company. 3. The above employee is employed for part of the year. , '

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RAPADIA
(REGISTERED)

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ACCOUNTANTS

RAHEJA C H A M B E R S , 21 3. N A R I M AN POINT, MUMBAI 400 02K INDIA

PHONES : ( 9 1 - 2 2 ) 2284 3 4 7 5 . 2 2 8 4 - 3 4 9 0 , 2 2 0 2 6 4 7 7 . 2 2 8 3 6!O 4 FAX , ( 9 1 - 2 2 ) . 2 2 8 3 _ 6 1 9 3

AUDITOR'S REPORT TO THE MEMBERS OF HATHWAY INVESTMENTS PRIVATE LIMITED We have audited the attached Balance Sheet of HATHWAY INVESTMENTS PRIVATE LIMITED as at 3.1.* March, 2004 and also the Profit and Loss Account for the. year ended on that date annexed thereto. These financial statements are the responsibility of the Company's management. Our responsibility is to express "an opinion on these financial statements based on our audit. . We conducted our audit, in accordance with auditing standards generally accepted in India. Those Standards require that we plan and perform the audit to obtain reasonable assurance- .about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An" audit also includes assessing the accounting principles used and significant estimates made by the management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. ' As required by the Companies (Auditor's Report) Order, 2003 issued by the Central Government of India in terms of sub-section (4A) of section 227 of the Companies Act, 1956, we enclose in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said order. Further to our comments in the Annexure referred to above, we report that: 1. 2. 3. 4. We have obtained all the information and explanations, which to the best of our knowledge and belief were necessary for the purposes of our audit; 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 the books; The Balance Sheet and Profit and Loss account dealt with by, this report are in agreement with the books of account; In our opinion, the valuation policy adopted by the Company in respect of certain shares & securities which were held as Investments and converted to stock in trade, in earlier years, is not in consonance with the valuation policy specified in Accounting Standard for -Accounting of Investments (AS 13) issued by the Institute of Chartered Accountants of India. Had such shares and securities been valued consistently at lower of cost^or market value, as specified in AS 13, the value of such shares & securities would have been lower by and accumulated losses would have been higher by Rs. 75. 76 lakhs, however, the profit for the year would have been higher-by Rs. 65;62 lakhs.

: CHBNNAI,

NEW DELHI * JA1PTJH

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G. M. KAPAD1A & CO.

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Subject to our observation .in para 4 herein above, .in our opinion, the Balance Sheet and the Profit & Loss Account dealt with by,this report comply with the Accounting Standards referred to in sub-section (3C) of Section 211 of the Companies Act, 1956 to the extent applicable to the Company;, " On the basis of the written-representations received from the directors, as on 31st March, 2004; and taken on record by the Board of Directors, we report that none of the directors is^ disqualified as on 31st March, 2004 from being appointed as a director in terms of clause (g) of sub-section (1) of Section 274 of the Companies Act, 1956; . Subject to our observation in para 4 herein above, in our opinion and to the best of our information and according to the explanations given to us, the accounts give the information required by the Companies Act, 1956, in the m'anner so required and give.a true and fair view in conformity with the accounting principles generally accepted in India: , (a) (b) in the case of the Balance Sheet, of the. state of affairs of the Company as at 31st March, 2004; and . . - . in the case of the Profit and Loss Account, of the profit for the year ended on that date.

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For G. M. KAPADIA & CO. Chartered Accountants

Mumbai Dated: September 14,2004

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(ATULSHAH) Partner (Membership No, 39569)

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-"*3 G . M . KAPADIA & CO., -;.-

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ANNEXURE TO THE AUDITOR'S REPORT


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- (a) The~Cpmpany has maintained proper records showing full particulars including quantitative'details and situation of fixed assets.- -; ". . (b) The management has physically verified the. fixed assets'during the year. In , .pur opinion, frequency of sxich verification is reasonable having reg'af d t p the \ size jof the Company and nature of its assets. Material discrepancies noticed . on such verification have been properly'dealt with-in the-books pf account. _ (c) The Cornpany. has not disposed off substantial part of"its fixed assets during " t h e year. , -- ! " . . ; - - - _ "

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, (ii) / (a) The stocks. of shares & securities have been physically verified by the . : management during the year. In our opinion the frequency of verification-is . ' " ' . . reasonable. . .---..-. (b) -In our opinion the procedures of physical verification pf'stocks of shares. & securities; followed -by the management were reasonable and adequate in - relation to the size of the Cpmpany and the nature of its business. " ' -"
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(c) The Cornpany-is maintaining.proper records of inventory. No discrepancies . . . were noticed, on physical verification between the physical stocks and the -. book records: ;

(iii) (a)-The. Company has granted .interest free advance to 2 companies cpvered in : ''.;.,' . . .the register maintained under sectipn 301 of the Companies Act, 195.6. The , . " ' . -maximum amount involved during the year was Rs. 389.20 lakhs and the . , ' . year^end balance of loans granted to such parties was Rs. 359.64 lakhs. The % " " Cbmpany^has taken interest free ipans'from 4 parties covered in the register . - . - . - ' maintained under sectipn 301 pfthe^Cpmpanies Act, ;1956. The maximum ampunt invplved during the year was Rs. 6,694.02 lakhs and the year-end - balance'.pflpans taken from such parties-was Rs. 6,659.52 lakhs. -.- . (b) The above mentioned loans and advances are interest free. In our ppinion and according to the information and explanation given to us, other terms.and conditions of these loans and-advances are, prima facie, not prejudicial to the interest of the Company; _ , . ' . - " . ^ . '-'" - . , - - , :-"_ .. . (c) The Company and the-parties are regular in; repaying the principal amounts " wherever stipulated. Since these loans and advances are interest"free there is : - - no question: of payment of interest, i. ' r : ,

''-': : -(d) As informed-to. us, the repayment dates have-not. been specified and . accordingly, there is no overdue amount of loans and advances taken from / granted to the parties cpvered in the register maintained u/s. 301 pf the Cpmpanies Act, 1956.

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G . M . KAPADIA . & " CO.

(iv)

In our opinion,- there are adequate internal control-procedures Commensurate with the size of the Company and-the nature of its" business, with regard to purchase of -.- inventory and fixed assets and for the sale of goods. During the course of pur ,-. . . audit,/we have, neither come across nor have we been informed of, any continuing -.'".. failure to'correct major weaknesses in internal-control. : . - : . :_ -

(v) .. (a) According to the information and explanations given :to us, we are of .the _- '- opinion. that -the .transactions that need to .be entered .into the register in. : ? pursuance of section 301" of the Companies Act, 1956 have been so entered.
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(b) In bur opinion and according to .the information and explanation given to us, .the transactions made in-pursuance of contracts-or arrangements entered in the register maintained under section 301 of the .Companies Act, 1?56 and exceeding Rs. 5 lakhs in respect of any'party during the year'have been made at prices which are reasonable having, regard to the=pre_vailing market prices at-the relevant time where such market prices are available. _ , - - ; The Company has riot accepted deposits from the public^ - . . " .-" .

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During the year the Company had no formal internal audit system. However, there exists Audit Committee of the Company comprising of three ;Directors; The Audit , Committee reviews the. business matters of the Company in the meetings. '

Xviii). The .provisions of clause (d) of sub-section (l'):of.section 209 of the Companies - Act, 1956"regarding maintenance of cost records are not applicable to the - Company.

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(a) According to the information and explanations given to us and according to the records examined by us, the Company is regular in depositing with the appropriate authorities undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees' State Insurance,Income-tax, Sales-tax, Wealth .Tax, Custom Duty, Excise Duty, cess, and other material statutory dues applicable to it. According to the information and explanations given to us, no .undisputed amounts payable in respect of ''. these/statutory dues were in arrears, as at March 31, 2004 for a period of . more than six months from the date they became payable. (b) According to the information and explanations given to us, there are no dues of sales tax / custom duty / wealth tax 7 excise duty /..cess, which have no_t - been deposited on account of any dispute^other than disputed interest tax as Indicated below. . . - ."

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Name of the Statute Interest tax Act, .-" 1974 .,-

Nature of the Dues

Amount (Rs.)

Forum where dispute is pending Income Tax Appellate Tribunal, Mumbai

Interest tax . 226,901 . . -

The accumulated losses of the Company are not more than fifty percent of its net worth. The Company has not- incurred, cash .loss-during the financial year.
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