Wealth Management 10-11.pmd - inditrade

JRG Wealth Management Limited 

Annual Report 2010 - 2011 

Corporate Information 

Board Members (as on 25.07.2011) 

1. Mr. T.M. Venkataraman - Director 

2. Mr. George Koshy - Director 

3. Mr. Gaurav Vivek Soni - Director 

4. Mr. Harish Galipelli - Director 

5. Mr. Samson K.J. - Managing Director 

Statutory Auditors 

M/s. BSR & Associates 

KPMG House, No. 10 

Mahatma Gandhi Road 

Nungambakkom 

Chennai - 600 034 

Bankers 

HDFC Bank Ltd. 

The Federal Bank Ltd. 

ICICI Bank 

Axis Bank 

State Bank of Travancore 

The South Indian Bank Ltd. 

Registered Office 

First Floor, MES Building 

Kaloor, Cochin, Kerala - 682 017 

Corporate Office 

JRG House, Ashoka Road 

Kaloor, Kochi - 682 017, Kerala 

Tel: +91-484-2409900 

Fax: +91-484-2409922 

Email: jrg@jrg.co.in 

Website: www.inditrade.com 

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NOTICE 

Notice is hereby given that the Fifteenth Annual General Meeting of the Members of the Company will be held on Wednesday, 

the 28 th day of September 2011 at the Corporate Office of the Company at ‘JRG House’, Ashoka Road, Kaloor, Cochin - 

682017, at 3 p m to transact the following business: 

ORDINARY BUSINESS 

1. To receive, consider and adopt the audited Balance Sheet as at March 31, 2011 and the Profit and Loss Account for the 

year ended on that date together with the report of the Directors’ and the Auditors’ thereon. 

2. To appoint a Director in place of Mr. Gaurav Vivek Soni who retires by rotation and being eligible, offers himself for reappointment. 

3. To appoint Auditors and fix their remuneration. 

SPECIAL BUSINESS 

4. To consider and, if thought fit, to pass with or without modification(s), the following resolution as an Ordinary Resolution: 

RESOLVED THAT Mr. Harish Galipelli who was appointed as an Additional Director of the Company pursuant to Section 

260 of the Companies Act, 1956 in the Board meeting held on 25.07.2011 with effect from that date and who holds the 

said office up to the date of this Annual General Meeting and a Notice in respect of whom has been received by the 

Company from a Member signifying his intention to propose the candidature of Mr. Harish Galipelli for the Office of 

Director under Section 257 of the Companies Act, 1956, be and is hereby appointed as the Director of the Company with 

effect from the date of Annual General Meeting whose office shall be liable to retirement by rotation. 

RESOLVED FURTHER THAT the Board of Directors of the Company be and are hereby authorized to do such acts, 

deeds and things as may be necessary and to file necessary forms with the statutory authority to give effect to the above 

resolution. 

5. To consider and, if thought fit, to pass with or without modification(s), the following resolution as an Special Resolution: 

RESOLVED THAT pursuant to the provisions of Section 198, Section 269 and Section 309 and other applicable provisions, 

if any, of the Companies Act, 1956, (“the Act”) read with Schedule XIII to the Act, or any amendment or modification or reenactment 

thereof and subject to such approvals as may be necessary, the consent of the shareholders be and is hereby 

accorded for appointment of Mr. Samson KJ as Managing Director for a period of 2 Years with effect from 04.05.2011 on 

maximum remuneration of Rs 15 lakhs per annum including ESOP and Bonus if any. 

RESOLVED FURTHER THAT subject to such approval as may be necessary in the event of inadequacy of profit, the 

consent of the Company be and is hereby accorded to pay such maximum remuneration payable under Para B section 

II Part II of the Schedule XIII of the Companies Act, 1956, depending upon effective capital of the Company as the 

minimum remuneration payable to him during the period of his tenure. 

RESOLVED FURTHER THAT the Board of Directors of the Company be and are hereby authorized to do such acts, 

deeds and things as may be necessary and to file necessary forms with the statutory authority to give effect to the above 

resolution. 

By order of the Board 

Place : Kochi Samson KJ 

Date : 25.07.2011 Managing Director 

Notes: 

a) The Explanatory Statement pursuant to section 173(2) of the Companies Act, 1956 in respect of the special 

business is annexed hereto. 

b) A MEMBER ENTITLED TO ATTEND AND VOTE IS ENTITLED TO APPOINT PROXY (IES) TO ATTEND AND 

VOTE INSTEAD OF HIMSELF AND THE PROXY NEED NOT BE A MEMBER. 

c) Proxies in order to be effective must be received by the Company at the registered office not less than 48 hours 

before the commencement of the meeting. 

d) Members are advised to bring their copy of the annual report for reference and discussion. The attendance slip 

duly signed by the member or proxy should be deposited at the venue of the meeting. 

e) The Register of Directors’ Shareholding, maintained under Section 307 of the Companies Act, 1956, will be 

available for inspection by the members at the AGM. 

f) The Register of Contracts, maintained under Section 301 of the Companies Act, 1956, will be available for inspection 

by the members at the registered office of the Company during working hours. 

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Explanatory statement pursuant to section 173(2) of the Companies act, 1956 

Item No 4 

Mr. Harish Galipelli was appointed as an Additional Director pursuant to Sec 260 of the Companies Act 1956 and his term of 

office expires at this Annual General Meeting. 

He holds a degree of masters in business administration in finance and has got over ten years of experience in various 

functional areas of commodity and currency markets including research, business development and corporate advisory. He 

has worked with companies like IL & FS Investment Commodity Brokers and Karvy Comtrade Limited. 

The Company has received a separate nomination from a member pursuant to Sec 257 of the Companies Act 1956 proposing 

his candidature along with the requisite deposit. None of the Directors except Mr. Harish Galipelli is concerned or interested 

in the resolution. 

Item No 5 

Mr. Samson K J was appointed as a whole time Director for a period of 2 years with effect from 4 th May 2009. At the Board 

meeting held on 23.01.2010 he was redesignated as Managing Director, all other terms and conditions remaining the same. 

The present term of appointment of Mr Samson K J expires on 03.05.2011. The Board had at its meeting held on 9 th May 2011 

reappointed him as the Managing Director for a further period of 2 years from 04.05.2011 subject to the shareholders approval. 

Mr. Samson K J is a graduate in commerce with over 24 years of experience in commodity operations. He has represented 

India on pepper in various international forums. He was Instrumental in formulation of International Pepper contract and 

Developed IPSTA into an international Exchange. He was also associated with World Bank for commodity awareness program 

across India. Mr. Samson has attended various training programs in and outside India and is also a Leading trainer for 

commodity derivates & expertise has been provided even to the foreign nationals. Mr. Samson has been in the employment 

of the Company since November 2007. He was the head of commodity operations of the Company before being appointed as 

a director. Considering his experience and his expertise in managing the affairs of the Company the Board had reappointed 

him w.e.f 04.05.2011 on a remuneration of not exceeding 15 lakhs per annum, including ESOPs and bonus, if any, subject to 

the shareholders approval. 

The appointment is pursuant to Para A Section II Part II of Schedule XIII of the Companies Act 1956. As per the provisions of 

Companies Act 1956 his appointment requires the approval of shareholders and hence the resolution. 

None of the Directors except Mr Samson K J is interested in the resolution 

By order of the Board 

Place : Kochi Samson KJ 

Date : 25.07.2011 Managing Director 

Particulars 

Mr. Gaurav Vivek Soni 

Age & Date of Birth 41 & 06.07.1970 

Date of First Appointment 

as a Director 04.05.2009 

Educational Qualification 

Experience / expertise 

Functional Areas 

B Com, ACA 

He is a qualified Chartered Accountant with over 19 years experience both in India & 

overseas in the areas of Finance, Accounts, Auditing and Commercial Operations. 

Experience of working both as an independent external reviewer (auditor) and as the 

Head of the Finance & Accounting function, has lead to a well-balanced approach in 

handling financial & control issues. 

He has vast experience in Budgeting, Strategic Planning, Financial Reviews, Fund 

Raising & Management, Finalisation & Consolidation of Accounts, Administration, 

Business Process Reviews, MIS Development, Project Appraisals, Auditing & 

Commercial Operations. 

Directorships of other a) JRG Securities Limited b) JRG Fincorp Limited 

companies c) JRG Insurance Broking Pvt. Limited 

Memberships of committees 

Shares held in the company Nil 

Any other important information - 

BRIEF PARTICULARS OF DIRECTOR SEEKING RE-APPOINTMENT 

Remuneration Committee 

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Particulars 

DIRECTORS’ REPORT 

Your Directors’ have great pleasure in presenting the Fifteenth Annual Report together with the audited statement of Accounts 

of your Company for the year ended 31st March, 2011. 

1. Operations & Financial Results 

Amount in Rs. 

2010-11 2009-10 

Total Revenue 201,315,320) 125,821,276) 

Profit/(Loss)Before Tax & prior period expenses (7,823,317) 1,476,987) 

Prior period Expenses -) -) 

Provision For Taxes 10,624,533) 34,52,155) 

Profit /(Loss) After Tax (18,447,850) (19,75,168) 

Balance in Profit & Loss Account Brought Forward (6,373,690) (4,398,521) 

Balance in Profit & loss A/c carried forward (24,821,539) (6,373,689) 

Your Company recorded revenue of Rs. 20.13 crores as against Rs. 12.58 crores in the previous year. The total 

expenditure incurred was Rs. 20.91 crores resulting in a loss of Rs 0.78 crores before prior period items and taxes, as 

against profit of Rs. 0.15 crores in the previous year. After provision for taxes the loss for the year is at Rs1.84 crores as 

against Rs 0.19 lakhs in the previous year. 

2. Subsidiary and its operations 

During the year the subsidiary company JRG Insurance Broking Private Limited has recorded revenue of Rs 71.82 lakhs 

as against Rs 146.25 lakhs in the previous year. The expenditure during the period was Rs 76.30 lakhs which has 

resulted in a loss of Rs 4.56 lakhs as against 10.78 lakhs during the previous year. 

3. Directors 

The term of appointment of Mr Samson KJ, as Managing Director expires on 03.05.2011.The Board reappointed him for 

a further period of two years on a maximum remuneration of Rs 15 lakhs per annum, including bonus and ESOPs if any, 

subject to the approval of shareholders in the ensuing Annual General Meeting. 

During the year, Mr Srirama Chandran.N, Director, has resigned from the Board of the Company w.e.f 18.03.2011.Board 

has appointed Mr Harish Galipelli as Additional Director at its meeting held on 26.07.2011. He will hold office only up to 

the conclusion of the ensuing Annual General Meeting. Company has received nomination from a member pursuant to 

Sec 257 of the Companies Act 1956 proposing the candidature of Mr. Harish Galipelli along with the requisite deposit. 

Board recommends his appointment in the ensuing AGM. 

Mr. Gaurav Vivek Soni, Director is retiring by rotation in the forthcoming Annual General Meeting. Being eligible, he 

offers himself for re-appointment. The Board of Directors of your Company recommends his reappointment. 

4. Directors’ Responsibility Statement 

As required under Section 217(2AA) of the Companies Act,1956, the directors hereby confirm that: 

a) In the preparation of the annual accounts, the applicable accounting standards had been followed and there are 

no material departures therefrom. 

b) the Directors had selected such accounting policies and applied them consistently and made judgments and 

estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company 

at the end of the financial year and of the loss of the company for that year; 

c) The Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance 

with the provisions of the act for safeguarding the assets of the Company and for preventing and detecting fraud 

and other irregularities; 

d) The Directors had prepared the annual accounts on a going concern basis. 

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5. Auditors 

The present Statutory Auditors M/s BSR & Associates, KPMG House, No. 10, Mahatma Gandhi Road, Nungambakkam, 

Chennai- 600034, will hold office up to the conclusion of the ensuing Annual General Meeting. Being eligible they offer 

themselves for reappointment. Board recommends their reappointment for the financial year 2011-12. 

6. Fixed deposits 

The Company has not accepted any fixed deposits from public during the year. 

7. Conservation of Energy, Technology absorption, Foreign Exchange Earnings and outgo: 

In terms of Section 217(1) (e) of the Companies Act, 1956 (as amended) and the Companies (Disclosure of particulars 

in report of Directors’) Rules, 1988, your directors furnish hereunder the additional information as required: 

A. Conservation of Energy - The operations of your Company are not energy sensitive in nature. However, measures 

are introduced to reduce the energy consumption at all levels in the organisation by optimal use of technology. 

B. Technology absorption - The Company has adopted the latest state-of-the-art software and hardware tools 

available in the market for rendering the commodity trading and other services more efficiently and effectively. 

C. Foreign Exchange Earnings and outgo - NIL 

8. Particulars of employees 

No employee of the Company was in receipt of remuneration exceeding the amount prescribed under Section 217(2A) 

of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975, during the financial year 

2010-11. 

9. Comments in CARO 2003 

Auditors have in their report under CARO 2003 commented that the system in respect of controls related to rendering of 

services to the employees of the Company / group needs to be strengthened and that the internal audit system of the 

Company needs to be strengthened to be commensurate with the size and nature of its business. 

10. Managements response 

The Board has noted the same and is taking adequate steps to strengthen the internal controls related to rendering of 

services to the employees of the Company / group. The Company has also initiated steps to improve the internal Audit 

system of the Company commensurate with the size and nature of its business. 

11. Acknowledgement 

The directors place on record their appreciation for the support and services rendered by the shareholders, exchanges, 

bankers, business associates and the employees of the company. 

For and on behalf of the Board 

Place : Kochi Samson KJ Gaurav Vivek Soni 

Date : 25.07.2011 MANAGING DIRECTOR DIRECTOR 

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Auditors’ report to the members of JRG Wealth Management Limited 

We have audited the attached Balance Sheet of JRG Wealth Management Limited (“the Company”) as at 31 March 2011, the 

Profit and Loss Account and also the Cash Flow Statement 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 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 (‘the Order’) as amended, 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: 

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, the profit and loss account and the cash flow statement dealt with by this report are in agreement with 

the books of account; 

d) in our opinion, the balance sheet, profit and loss account and the cash flow statement dealt with by this report comply with 

the accounting standards referred to in sub-section (3C) of Section 211 of the Companies Act, 1956, 

e) on the basis of written representations received from the directors, as at 31 March 2011 and taken on record by the Board 

of Directors, we report that none of the directors is disqualified as on 31 March 2011 from being appointed as director in 

terms of clause (g) of sub-section (1) of Section 274 the Companies Act, 1956; 

(f) 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 Act 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 31 March 2011; and 

(ii) in the case of the profit and loss account, of the loss of the Company for the year ended on that date. 

(iii) in the case of the cash flow statement, of the cash flows of the Company for the year ended on that date. 

For B S R & Associates 

Chartered Accountants 

Firm Registration No.: 116231W 

S Sethuraman 

Partner 

Membership No: 203491 

Chennai 

Date: 9 May 2011 

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Annexure to the Auditors’ Report 

(Referred to our report of even date) 

(i) (a) The Company has maintained proper records showing full particulars including quantitative details and situation 

of fixed assets. However the Company is in process of updating its records so as to include quantitative details in 

relation to certain class of fixed assets. 

(b) The Company has a regular programme of physical verification of its fixed assets by which all fixed assets are 

verified in a phased manner over a period of two years. In our opinion, this periodicity of physical verification is 

reasonable having regard to the size of the Company and the nature of its assets. In accordance with this programme 

certain fixed assets were verified during the year and no material discrepancies were noticed on such verification. 

(c) Fixed assets disposed of during the year were not substantial, as to affect the going concern assumption. 

(ii) 

The Company is a service company, primarily rendering services as brokers to various commodity exchanges. Accordingly 

it does not hold any physical inventories. Thus, paragraph 4(ii) of the Order is not applicable. 

(iii) According to the information and explanations given to us, we are of the opinion that there are no companies, firms or 

other parties covered in the register required under section 301 of the Companies Act, 1956. Accordingly, paragraph 

4(iii) of the Order is not applicable. 

(iv) In our opinion and according to the information and explanations given to us, and having regard to the explanation that 

the purchases of certain items of fixed assets are for the Company’s specialized requirements and similarly services 

rendered are for the specialized requirements of the buyers and suitable alternative sources are not available to obtain 

comparable quotations, there is an adequate internal control system commensurate with the size of the Company and 

the nature of its business with regard to purchase of fixed assets and sale of services, except in respect of controls related 

to rendering of services to the employees of the Company / group, which need to be strengthened. In our opinion and 

according to the information and explanations given to us, there is no continuing failure to correct major weaknesses in 

internal control system. The activities of the Company do not involve purchase of inventory and sale of goods. 

(v) In our opinion, and according to the information and explanations given to us, there are no contracts and arrangements 

the particulars of which need to be entered into the register maintained under section 301 of the Companies Act, 1956. 

(vi) The Company has not accepted any deposits from the public. 

(vii) In our opinion, the Company has an internal audit system. However the same need to be strengthened to be commensurate 

with the size and nature of its business. 

(viii) The Central Government has not prescribed the maintenance of cost records under section 209(1)(d) of the Companies 

Act, 1956 for any of the services rendered by the Company. 

(ix) a) According to the information and explanations given to us and on the basis of our examination of the records of 

the Company, amounts deducted/accrued in the books of account in respect of undisputed statutory dues including, 

Income-tax, Service tax, Provident fund, Employees’ State Insurance, Wealth tax and other material statutory dues 

have generally been regularly deposited during the year by the Company with the appropriate authorities. As 

explained to us, the Company did not have any dues on account of Customs duty, Investor Education and Protection 

Fund, Sales tax and Excise duty. There were no dues on account of cess under section 441A of the Companies Act, 

1956 since the aforesaid section has not yet been made effective by the Central Government. 

According to the information and explanations given to us, no undisputed amounts payable in respect of Provident 

Fund, Employees’ State Insurance, Income tax, Service tax, Wealth tax and other material statutory dues were in 

arrears as at 31 March 2011 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 Income tax, Sales tax, Wealth tax, 

Service tax, Customs duty, Excise duty and Cess which have not been deposited with the appropriate authorities 

on account of any dispute. 

(x) The Company does not have accumulated losses at the end of the financial year which has exceeded fifty percent of its 

net worth. It has not incurred cash losses in the current financial year and has also not incurred cash losses in the 

immediately preceding financial year. 

(xi) The Company did not have any outstanding dues to any financial institution, banks or debenture holders during the year. 

(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) In our opinion and according to the information and explanations given to us, the Company is not a chit fund or a nidhi 

/ mutual benefit fund/society. 

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(xiv) In our opinion and according to the information and explanations given to us, the Company is not dealing or trading in 

shares, securities, debentures or other instruments. 

(xv) In our opinion and according to the information and explanations given to us, the Company has not given any guarantee 

for loans taken by others from banks or financial institutions. 

(xvi) The Company did not have any term loans outstanding during the year. 

(xvii) According to the information and explanations given to us and on an overall examination of the balance sheet of the 

Company, we are of the opinion that there have been no funds raised on a short-term basis that has been used for long 

term investment by the Company. 

(xviii)The Company has not made any preferential allotment of shares to companies covered in the register maintained under 

Section 301 of the Companies Act, 1956. 

(xix) The Company did not have any outstanding debentures during the year. 

(xx) The Company has not raised any money by public issue. 

(xxi) According to the information and explanations given to us, no fraud on or by the Company has been noticed or reported 

during the course of our audit. 




S Sethuraman 

Partner 


Chennai 


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BALANCE SHEET 

(All amounts are in Indian Rupees except share data or as stated) 

Schedule As at As at 

No. 31 March 2011 31 March 2010 

SOURCES OF FUNDS 

Shareholders’ funds 

Share capital 1 92,624,270 92,624,270 

Reserves and surplus 2 4,000,000 4,000,000 

96,624,270 96,624,270 

APPLICATION OF FUNDS 

Fixed asset 3 

Gross block 41,109,912 45,816,604 

Less: Depreciation / amortization (26,181,618) (25,735,289) 

Net block 14,928,294 20,081,315 

Capital work in progress 1,032,131 - 

15,960,425 20,081,315 

Investments 4 15,000,000 55,350,000 

Deferred tax asset ( net ) 15 C (c) 2,844,531 1,836,704 

Current assets, loans and advances 

Sundry debtors 5 3,196,028 2,375,038 

Cash and bank balances 6 180,993,488 105,477,521 

Loans and advances 7 48,575,518 59,731,722 

232,765,034 167,584,281 

Current liabilities and provisions 

Current liabilities 8 192,252,259 152,086,719 

192,252,259 152,086,719 

Net Current Assets 40,512,775 15,497,562 

Debit balance in profit and loss account 9 22,306,539 3,858,689 

96,624,270 96,624,270 

Significant accounting policies and notes to the financial statements 15 

The schedules referred to above and the notes thereon form an integral part of the financial statements 

As per our report attached 



Firm registration No.:116231W 

For and on behalf of Board of Directors 


S Sethuraman Samson KJ Gaurav Vivek Soni 

Partner Managing Director Director 

Membership No.: 203491 

Place : Chennai 

Place : Kochi 

Date: 9 May 2011 Date: 9 May 2011 

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PROFIT AND LOSS ACCOUNT 


Schedule For the year ended For the year ended 


INCOME 

Broking income 184,870,927 117,211,987 

Other income 10 16,444,393 8,609,289 

201,315,320 125,821,276 

EXPENDITURE 

Operating costs 11 82,593,354 48,424,206 

Personnel costs 12 43,040,126 36,157,058 

Trading and other administrative expenses 13 34,368,608 21,366,341 

Provision for diminution other than 

temporary in the value of investments 15 C (m) 40,350,000 9,650,000 

Depreciation /amortization 3 6,869,701 6,930,734 

Interest and finance charges 14 1,916,848 1,815,950 

209,138,637 124,344,289 

Profit / ( loss ) before taxes (7,823,317) 1,476,987 

Provision for tax 

- Current tax 11,632,360 - 

- Deferred tax charge / ( benefit ) (1,007,827) 3,452,155 

Profit / ( loss ) after tax (18,447,850) (1,975,168) 

Balance in profit and loss account brought forward (6,373,689) (4,398,521) 

Balance in profit and loss account carried forward (24,821,539) (6,373,689) 

Earnings per share: 

Basic and diluted 15 C ( i ) (13.15) (3.07) 

Weighted average number of equity shares 

outstanding during the year 1,800,000 1,800,000 

Nominal value of equity shares (Rs) 10 10 













Place : Kochi 


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Schedules forming part of the financial statements 


As at 

As at 

31 March 2011 31 March 2010 

1. Share capital 

Authorised capital 

Equity Share capital 

4,000,000 ( Previous year: 4,000,000 ) 

equity shares of Rs 10 each 40,000,000 40,000,000 

Preference share capital 

8,000,000 ( Previous year: 8,000,000 ) 

equity shares of Rs 10 each 80,000,000 80,000,000 

Issued, subscribed and fully paid-up 

1,800,000 ( Previous Year: 1,800,000 ) 

equity shares of Rs 10 each fully paid up 18,000,000 18,000,000 

Of the above paid up equity shares 1,647,100 

( Previous year: 1,647,100 ) shares are held by the 

holding Company JRG Securities Limited including 

5 shares held under trust by various individuals. 

7,462,427 ( Previous Year: 7,462,427) 6 % 

preference shares of Rs 10 each fully paid up 74,624,270 74,624,270 

All the above paid up preference shares 

7,462,427 ( Previous year: 7,462,427) are held by 

the holding Company JRG Securities Limited . 92,624,270 92,624,270 

2. Reserves and surplus 

Securities Premium 4,000,000 4,000,000 

General Reserve 2,515,000 2,515,000 

Less: Debit balance in profit and loss account 

(As per contra - Schedule 9) (2,515,000) (2,515,000) 

4,000,000 4,000,000 

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3. Fixed assets 

Particulars 

As at 

01 April 2010 

Additions 

Gross block Depreciation /Amortization Net block 

Deletions / 

Writeoff 

As at 

31 March 2011 

As at 


For the Year 

On deletions / 

Writeoff 

As at 

31 March 2011 

As at 

31 March 2011 

As at 

31 March 2010 

Tangible Assets 

Furniture and fixtures 14,714,469 851,445 1,082,785 14,483,129 6,531,948 2,413,733 1,048,591 7,897,090 6,586,039 8,182,521 

Office Equipments 

including computers 14,717,483 943,614 3,779,465 11,881,632 9,367,282 1,976,797 3,679,187 7,664,892 4,216,740 5,350,201 

Electrical fittings 5,563,862 400,527 766,989 5,197,400 1,810,830 899,914 422,556 2,288,188 2,909,212 3,753,032 

Vehicles 500,219 - - 500,219 47,315 98,511 - 145,826 354,393 452,904 

V-SAT equipments 4,974,940 - - 4,974,940 3,492,862 700,379 - 4,193,241 781,699 1,482,078 

Intangible Assets 

Computer software 5,345,631 - 1,273,039 4,072,592 4,485,052 780,368 1,273,039 3,992,381 80,211 860,579 

Total 45,816,604 2,195,586 6,902,278 41,109,912 25,735,289 6,869,702 6,423,373 26,181,618 14,928,294 20,081,315 

Previous year 43,952,067 2,590,817 726,280 45,816,604 19,038,101 6,930,734 233,546 25,735,289 20,081,315 

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As at 

As at 


4. Investments 

Long term investment ( Unquoted , At cost ) 

Investment in Subsidiary company 

JRG Insurance Broking Private Limited 65,000,000 65,000,000 

6,500,000 ( Previous year: 6,500,000 ) 

equity shares of Rs 10 each 

Less: Provision for diminution other than 

temporary in the value of investments (50,000,000) (9,650,000) 

( Also refer note (C ) m of Schedule 15 ) 

15,000,000 55,350,000 

5. Sundry debtors 

Secured 

Debts outstanding for a period exceeding six months 

- Considered good - 265,129 

Other Debts 

- Considered good 32,802 1,445,842 

Unsecured 


- Considered good - 53,146 

- Considered doubtful 2,038,273 1,255,692 

Other Debts 

- Considered good 3,163,226 610,921 

- Considered doubtful - - 

5,234,301 3,630,730 

Less : Provision for bad and doubtful debts (2,038,273) (1,255,692) 

3,196,028 2,375,038 

Debts due from companies under the same mangement 

JRG Business Investment Consultants Limited (Maximum amount 

outstanding during the year Rs.38,252,419 (Previous year : Nil) 2,575,004 - 

6. Cash and bank balances 

Cash in hand 58,268 47,701 

Balances with scheduled banks 

- in current account 80,157,505 38,650,422 

- in deposit account (fixed deposits amounting to Rs.73,890,314 

(Previous year: Rs. 60,107,690) are pledged with banks as security 

for guarantees issued by banks in favour of various exchanges) 100,777,715 66,779,398 

180,993,488 105,477,521 

- 13 -



7. Loans and Advances 


Unsecured and considered good 


As at 

As at 


Loan to JRG Insurance Broking Private Limited 

(wholly owned subsidiary company)* - 983,575 

Deposits with exchanges 35,550,000 45,050,000 

Interest accrued 2,914,210 529,582 

Rental and other deposit 4,116,687 7,126,088 

Advances recoverable in cash or in kind or for value to be received** 5,078,153 3,816,563 

Advance tax (net of provisions) 916,468 2,225,914 

48,575,518 59,731,722 

Unsecured and considered doubtful 

Advances recoverable in cash or in kind or for value to be received 2,476,193 2,476,193 

Rental and other deposits 492,372 - 

Less: Provision for doubtful loans and advances (2,968,565) (2,476,193) 

48,575,518 59,731,722 

* Maximum amount outstanding at any time during the year 983,575 1,321,487 

** Includes dues from director (Refer note C( e ) of schedule 15) 100,000 - 

Maximum amount outstanding during the year from directors 100,000 - 

8. Current liabilities 

Sundry Creditors 

- Micro enterprises and small enterprises * - - 

- Others 

- Client 155,426,400 129,062,533 

- Expenses 25,933,546 10,731,703 

- Payable to exchange 798,785 1,734,512 

Security deposit 8,033,930 8,609,085 

Other liabilities 2,059,598 1,948,886 

192,252,259 152,086,719 

* Refer note C( k ) of schedule 15 

9. Profit and loss account 

Debit balance in profit and loss account 24,821,539 6,373,689 

Less: As per contra in general reserve - Schedule 2 (2,515,000) (2,515,000) 

22,306,539 3,858,689 

- 14 -





10 Other income 

Interest received on fixed deposits ( Tax deducted at source : 

Rs.713,192 ,Previous year : Rs. 966,767 ) 5,443,917 5,433,501 

Interest / penal charges for delayed payment 

(Tax deducted at source : Rs Nil ,Previous year : Rs Nil) 3,251,601 2,220,439 

Interest on loan given to Group Companies ( Tax deducted at source : 

Rs.114,880 ,Previous year : Rs. Nil ) 1,164,275 - 

Service tax refunded 5,831,293 - 

Liability no longer required written back 390,167 189,874 

Miscellaneous income 363,140 765,475 

16,444,393 8,609,289 

11 Operating costs 

Business incentive 56,159,833 30,158,742 

Turnover charges 23,283,252 15,411,913 

Connectivity charges 2,319,282 2,004,559 

Other Trading expenses 830,987 848,992 

82,593,354 48,424,206 

12 Personnel costs 

Salaries, wages and bonus 38,054,617 30,781,642 

Contributions to provident and other funds 1,710,560 1,718,614 

Staff welfare expenses 3,274,949 3,656,802 

43,040,126 36,157,058 

13 Trading and other administrative expenses 

Power and fuel 1,868,865 1,743,205 

Rent 11,168,912 7,516,298 

Repair and maintenance- others 4,822,714 1,048,430 

Traveling expenses 2,483,888 1,151,058 

Communication expenses 2,762,520 2,209,711 

Printing and Stationery 620,858 763,525 

Office expenses 2,533,213 1,718,378 

Advertisement and business promotion 2,253,232 652,551 

Registration and renewals 1,535,079 1,805,863 

Professional and consultancy charge 2,325,716 1,552,579 

Directors sitting fees 70,000 80,000 

Provision for doubtful loans and advances 492,372 - 

Provision for bad and doubtful debts 782,581 705,378 

Loss on sale of fixed assets 352,005 254,834 

Miscellaneous expenses 296,653 164,531 

34,368,608 21,366,341 

14 Interest and finance charges 

Interest 247,966 113,813 

Other charges 1,668,882 1,702,137 

1,916,848 1,815,950 

- 15 - 

As at 

As at 

31 March 2011 31 March 2010



CASH FLOW STATEMENT 




Cash flow from operating activities 

Net profit / (loss) before tax (7,823,317) 1,476,987 

Adjustments for: 

Depreciation /amortization 6,869,701 6,930,734 

Provision for doubtful debts 782,581 705,378 

Provision for doubtful loans and advances 492,372 - 

Provision for diminution other than temporary in the value of investments 40,350,000 9,650,000 

Loss on sale of assets (net) 352,005 254,834 

Interest income (9,859,793) (7,653,940) 

Liabilities/ provisions no longer required (390,167) (189,874) 

Interest expense 247,966 113,813 

Operating profit before working capital changes 31,021,348 11,287,932 


(Increase) / decrease in sundry debtors (1,603,571) 2,686,851 

(Increase) /decrease in loans and advances 11,216,101 (25,142,185) 

(Decrease) / increase in current liabilities and provisions 40,555,707 40,100,899 

Cash generated from operations 50,168,237 17,645,565 

Tax paid 9,800,000 - 

40,368,237 17,645,565 

Net cash generated from operating activities ( A ) 71,389,585 28,933,497 

Cash flow from investing activities 

Purchase of fixed assets (3,227,717) (2,590,817) 

Proceeds from sale of fixed assets 126,900 237,900 

Interest income 7,475,165 11,329,387 

Net cash used in investing activities ( B ) 4,374,348 8,976,470 

Cash flow from financing activities 

Interest paid (247,966) (113,813) 

Net cash from financing activities ( C ) (247,966) (113,813) 

Net increase/(decrease) in cash and cash equivalents (A+B+C) 75,515,967 37,796,154 

Cash and cash equivalents at the beginning of the year 105,477,521 67,681,367 

Cash and cash equivalents at the end of the year 6 180,993,488 105,477,521 













Place : Kochi 


- 16 -





15. (A) Background 

JRG Wealth Management Limited (“JRG Wealth” or “the Company”) was incorporated on 29 February 1996. The 

Company is a subsidiary of JRG Securities Limited (“parent company”) and is primarily engaged in the business as 

brokers for commodities trading in various commodity exchanges. 

15. (B) Significant Accounting Policies 

a. Basis of preparation of financial statements 

The financial statements of the Company have been prepared and presented in accordance with Indian Generally 

Accepted Accounting Principles (GAAP) under the historical cost convention on the accrual basis. GAAP comprises 

accounting standards notified by the Central Government of India under Section 211 (3C) of the Companies Act, 

1956, other pronouncements of Institute of Chartered Accountants of India and the provisions of Companies Act, 

1956. 

b. Use of estimates 

The preparation of financial statements in conformity with GAAP requires management to make estimates and 

assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent liabilities on the 

date of the financial statements and reported amounts of income and expenses during the period. Actual figures 

may differ from these estimates. Any revision to accounting estimates is recognized prospectively in current and 

future periods. 

c. Fixed assets and depreciation 

Fixed Assets are carried at cost of acquisition or construction less accumulated depreciation and impairment, if 

any. Cost comprises the purchase price and any attributable cost of bringing the asset to its working condition for 

its intended use. 

Depreciation on fixed assets is provided on Straight Line method. The rates of depreciation prescribed in Schedule 

XIV to the Companies Act, 1956 are considered as the minimum rates. If the management’s estimate of the useful 

life of a fixed asset at the time of acquisition of the asset or of the remaining useful life on a subsequent review is 

shorter than that envisaged in the aforesaid schedule, depreciation is provided at a higher rate based on the 

management’s estimate of the useful life/remaining useful life. The rates of depreciation followed by the Company 

are as follows: 

Asset group Depreciation rates (%) 

Furniture and fittings 20.00% 

Electrical fittings 20.00% 

Office equipments 20.00% 

Computers 16.21% 

Softwares 20.00% 

V- Sat equipments 16.21% 

Vehicle 20.00% 

Depreciation in respect of office furnishing (primarily in the nature of leasehold improvements) is provided on the 

straight-line method over a period of 5 years since the management is reasonably certain of renewal of lease 

terms. 

Individual assets costing Rs 5,000/- or less are depreciated at 100% in the year of purchase. 

d. Impairment of Assets 

The Company assesses at each balance sheet date whether there is any indication that an asset may be impaired. 

If any such indication exists, the Company estimates the recoverable amount (higher of net realizable value and 

value in use) of the asset. If such recoverable amount of the asset or the recoverable amount of the cash generating 

unit to which the asset belongs is less than the carrying amount, the carrying amount is reduced to its recoverable 

amount. The reduction is treated as an impairment loss and is recognized in the profit and loss account. If at the 

balance sheet date there is an indication that a previously assessed impairment loss no longer exists, the recoverable 

amount is reassessed and the asset is reflected at the recoverable amount subject to a maximum of depreciable 

historical cost. 

- 17 -





e. Revenue 

Brokerage income in relation to commodities broking activity is recognised on the trade date of transaction (net of 

service tax), upon confirmation of trade by the commodity exchange. Interest income is recognized on time proportion 

basis. 

f. Investments 

Investments are either classified as current or long-term based on the management’s intention. Current investments 

are carried at the lower of cost and fair value. Long-term investments are carried at cost and provisions recorded 

to recognize any decline, other than temporary, in the carrying value of each investment. 

g. Operating Lease 

Operating lease payments are recognized as an expense in the profit and loss account on a straight line basis over 

the lease term. 

h. Employee benefits 

I. Short term employee benefit plans 

All short term employee benefit plans such as salaries, wages, bonus, special awards and, medical benefits 

which fall due within 12 months of the period in which the employee renders the related services which 

entitles him to avail such benefits are recognized on an undiscounted basis and charged to the profit and loss 

account. 

II. 

Defined Contribution Plan 

Contributions to the provident funds are made monthly at a predetermined rate to the Regional Provident 

Fund Commissioner and debited to the profit and loss account on an accrual basis. 

III. 

Defined Benefit Plan 

Provision is made for gratuity based on actuarial valuation, carried out by an independent actuary as at the 

balance sheet date using the projected unit credit method. All actuarial gains and losses arising during the 

year are recognized in the Profit and Loss Account of the year. 

i. Taxation 

Income-tax expense comprise current tax (i.e. amount of tax for the period determined in accordance with the 

income-tax law) and deferred tax charge or credit (reflecting that tax effects of timing differences between accounting 

income and taxable income for the period). The deferred tax charge or credit and the corresponding deferred tax 

liabilities or assets are recognized using the tax rates and tax laws that have been enacted or substantively 

enacted by the balance sheet date. Deferred tax assets are recognized only to the extent there is a reasonable 

certainty that the assets can be realized in future; however, where there is unabsorbed depreciation or carried 

forward loss under taxation laws, deferred tax assets are recognized only if there is a virtual certainty of realization 

of such assets. Deferred tax assets are reviewed as at the balance sheet date and written down or written up to 

reflect the amount that is reasonably/virtually certain (as the case may be) to be realized. Current tax and deferred 

tax assets and liabilities are offset to the extent to which the Company has a legally enforceable right to set off and 

they relate to taxes on income levied by the same governing taxation laws. 

j. Provisions, contingent liabilities and contingent assets 

The Company creates a provision when there is present obligation as a result of past event that probably requires 

an outflow of resources and a reliable estimate can be made of the amount of the obligation. A disclosure for a 

contingent liability is made when there is a possible obligation or a present obligation that may, but probably will 

not, require an outflow of resources. Where there is a possible obligation or a present obligation in respect of which 

the likelihood of outflow of resources is remote, no provision or disclosure is made. Contingent assets are neither 

recognised nor disclosed in the financial statements. 

k. Cash flows 

Cash flows are reported using the indirect method, whereby profit before tax is adjusted for the effects of transactions 

of a non–cash nature and any deferrals or accruals of past or future cash receipts or payments. The cash flows from 

regular revenue generating, financing and investing activities of the Company are segregated. 

- 18 -





l. Earnings per share 

Basic earnings per share is computed by dividing net profit or loss for the period attributable to equity shareholders 

by the weighted average number of shares outstanding during the year. Diluted earnings per share amounts are 

computed after adjusting the effects of all dilutive potential equity shares. The number of shares used in computing 

diluted earnings per share comprises the weighted average number of shares considered for deriving basic 

earnings per share, and also the weighted average number of equity shares, which could have been issued on the 

conversion of all dilutive potential shares. In computing dilutive earnings per share, only potential equity shares 

that are dilutive and that decrease profit per share are included. 

15 (C) Notes to the financial statements 

a. Capital commitments and contingencies: 

· Bank guarantees outstanding Rs 121,500,000 (Previous Year: Rs. 86,673,000). 

· Estimated amount of contracts remaining to be executed on capital account net of capital advances and not 

provided for, amounts to Rs. Nil, (Previous Year: Rs. Nil). 

· Claims against not acknowledged as debts Rs 10,432,462 (Previous Year: Rs. 8,726,163) 

The arrears of cumulative preference dividends (including tax thereon) on 6% cumulative convertible preference 

shares as at 31 March 2011 is Rs.8,775,832 (Previous Year: 3,554,726). 

b. Auditor’s remuneration ( included in legal and professional expenses ) 

Particulars Year ended 31 March 2011 Year ended 31 March 2010 

Statutory audit 500,000 500,000 

Tax audit 50,000 50,000 

Out of pocket expenses 46,250 95,140 

Total * 596,250 645,140 

*excludes service tax 

c. Deferred Taxes 

The major components of deferred tax assets and liabilities are outlined below: 

Particulars As at 31 March 2011 As at 31 March 2010 

Deferred tax assets 

Arising from timing difference in respect of carry 

forward of unabsorbed depreciation. - 973,822 

Arising from timing difference in respect of provisions 

for doubtful debts and loans and advances. 1,663,146 1,153,152 

Arising from timing difference in respect of Depreciation 1,213,075 - 

Deferred tax liabilities 

Arising from timing difference in respect of Depreciation - (290,270) 

Others (31,690) - 

Net deferred tax asset 2,844,531 1,836,704 

- 19 -





d. Related party disclosures. 

Names of related parties and nature of relationship: 

Holding Company 

Subsidiary Company 

Fellow Subsidiary Company 

JRG Securities Limited 

JRG Insurance Broking Private Limited 

JRG Business Investment Consultants Limited 

JRG Fincorp Limited 

Key Managerial Personnel Samson K J (Managing Director) (From 23 January 2010) 

Whole Time Director ( From 04 May 2009 till 22 January 2010) 

Giby Mathew (Managing Director) (Resigned on 04 May 2009) 

Transactions and balance with related parties 

Particulars 

Equity contribution from parent company 

Transaction 

during year ended 

31 March 2011 

Amount (payable) / 

receivable as at 

31 March 2011 

JRG Securities Limited (Preference shares) -) (74,624,270) 

Loan given to subsidiary ( net ) (983,575) -) 

Loan given to fellow subsidiary (net) 

JRG Business Investment Consultants Limited (255,105) -) 

Reimbursement of expenses 

JRG Securities Limited 2,094,418) (59,500) 

JRG Insurance Broking Private Ltd 88,902) -) 

JRG Business Investment Consultants Limited (13,618) -) 

Interest paid (net) 

JRG Fincorp Limited 42,799) -) 

JRG Securities Limited 61,471) -) 

Shared service expenses (including service tax) 

JRG Securities Limited 9,375,500) (9,375,500) 

Interest received from JRG Business 

Investment Consultants Limited 1,114,182) -) 

Amount receivable from JRG Business Investment 

Consultants Limited in relation to trading in commodities 2,575,004) 2,575,004) 

Remuneration 

Salaries and other allowances - 

Samson K J 842,720) -) 

- 20 -





Particulars 

Equity contribution from parent company 

Transaction 

during year ended 


Amount (payable) / 

receivable as at 


JRG Securities Limited (Preference shares) 74,624,270 (74,624,270) 

Loan given to subsidiary ( net ) 983,575 983,575) 

Reimbursement of expenses - -) 

JRG Securities Limited 2,530,964 -) 

JRG Insurance Broking Pvt Ltd 83,575 -) 

JRG Business Investment Consultants Limited 1,048,668 255,105) 

Interest paid (net) 

JRG Fincorp Limited 586,111 -) 

JRG Securities Limited - -) 

Remuneration 

Salaries and other allowances - 

Giby Mathew 175,000 -) 

Samson K J 690,135 -) 

e. Managerial remuneration 

Remuneration to Directors Year ended 31 March 2011 Year ended 31 March 2010 

Salaries and allowances* 842,720 865,135 

842,720 865,135 

*The directors are covered under the Company’s group gratuity scheme along with other employees of the Company. 

Contribution to gratuity is based on actuarial valuation done on an overall Company basis and hence is excluded 

above. 

The remuneration payable to the managing director of the company is in excess of the limits approved by the share 

holders at the Annual General Meeting by Rs.100,000. Pending such recovery, the excess amount of Rs.100,000 

paid to him has been shown as recoverable under loans and advances. 

f. Security margins from clients 

In order to secure the performance by the clients of their obligations, commitments and liabilities to the Company, 

bank guarantees are placed as margins in favour of the Company. Such bank guarantees are held by the Company 

in a fiduciary capacity on behalf of its clients and are not recognised in the financial statements. In case such 

margins are received in cash, the same are disclosed under creditors. 

- 21 -





g. Employee benefit 

The following table set out the status of the gratuity plan as required under AS 15 (Revised 2005) and the 

reconciliation of opening and closing balances of the present value of the defined benefit obligation: 

Particulars 

Year ended 

31 March 2011 

Year ended 


Change in present value of obligations 

Obligations at beginning of the year/ period 1,052,685 937,627 

Current service cost 319,412 375,443 

Interest Cost 88,892 79,652 

Actuarial (gain) / loss (241,900) (340,037) 

Benefits paid (385,105) - 

Obligations at the end of the year 833,984 1,052,685 

Change in Plan assets 

Fair value of plan assets at beginning of the year 1,341,339 1,230,586 

Prior year adjustment 

Expected return on plan assets 100,869 104,600 

Actuarial gain / (loss) 6,325 6,153 

Contributions 75,815 - 

Benefits paid (385,105) - 

Fair value of plan assets at end of the year 1,139,243 1,341,339 

Reconciliation of present value of the 

obligation and the fair value of plan assets 

Present value of the defined benefit obligation at the end of the year 833,984 1,052,685 

Fair value of plan assets at the end of the year 1,139,243 1,341,339 

Amount of (asset ) / liability recognized in the balance sheet (305,259) (288,654) 

Gratuity cost for the year 


Interest cost 88,892 79,652 

Expected return on plan assets (100,869) (104,600) 


Net gratuity cost (included in Contribution to 

provident and other funds of Schedule 12) 59,210 4,305 

Assumptions 

Interest rate 8.50% 8.50% 

Estimated rate of return on plan assets 8.50% 8.50% 

Rate of growth in salary levels 7.50% 7.50% 

Investment details of plan assets 

Funds managed by Insurer 100.00% 100.00% 

h. Segment reporting 

a) Primary Segment Information (by Business Segments) 

The Company is engaged only in the business of acting as brokers of various commodity exchanges. Thus, 

it operates in a single Primary Segment. 

b) Secondary Segment Reporting (by Geographical Segments) 

The Company only caters to the needs of the domestic market. Hence there are no reportable geographical 

segments. 

- 22 -





i. Earnings per share 

Particulars 

As at 

31 March 2011 

As at 


Net (loss) after taxation (18,447,850) (1,975,168) 

Unpaid preference dividend (including tax thereon) (5,221,106) (3,554,726) 

Net (loss) considered for computing earnings / (loss) per share (23,668,956) (5,529,894) 

Number of equity shares considered as basic weighted 

average shares outstanding 1,800,000) 1,800,000) 

Basic and diluted earnings / (loss) per share (in Rs) (13.15) (3.07) 

j. Quantitative particulars 

As the Company is engaged in service activity, provision of information relating to quantitative details of sales and 

certain information as required under paragraphs 3, 4C and 4D of part II of Schedule VI to the Companies Act, 1956 

are not applicable. 

k. Micro, Small and Medium Enterprises Development Act, 2006 

The management has identified enterprises which have provided goods and services to the Company and which 

qualify under the definition of “Micro and Small Enterprises” as defined under Micro, Small and Medium Enterprises 

Development Act, 2006 (“the Act”). Accordingly, the disclosure in respect of the amounts payable to such enterprises 

as at 31 March 2011 has been made in the financial statements based on the information received and available 

with the Company. There are no overdue amounts payable to such enterprises as at 31 March 2011. 

l. Foreign currency forward contracts 

The Company has no receivable and payable in foreign currency as at the balance sheet date. Hence the Company 

has not entered into any foreign currency forward contract to hedge its risk associated with foreign currency 

fluctuations. 

m. JRG Insurance Broking Private Limited (‘JIBPL’) is a wholly owned subsidiary of the Company. As at 31 March 

2011, JIBPL has incurred accumulated losses aggregating to Rs.49.79 million which have significantly eroded the 

share capital of JIBPL. During the previous year, the management of JIBPL have commenced various steps 

including rationalization of the number of employees, changes to the revenue model, streamlining of the sales 

force etc. After considering the revised business plans in the context of the aforesaid changes, the management 

had made a provision of Rs.9.65 million towards a diminution other than temporary in the value of the investment 

during the previous year. However during the current year the above mentioned steps commenced during the 

previous year, were not able to be achieve the expected results. Accordingly the management has made a further 

provision of Rs.40.35 million towards a diminution other than temporary in the value of the investment after 

considering the revised budgets and business plans. 

n. Prior year comparatives 

Prior year figures have been reclassified / regrouped wherever necessary to conform to the current year’s 

classification. 










Place : Kochi 


- 23 -



BALANCE SHEET ABSTRACT & GENERAL BUSINESS PROFILE 

I 

Registration Details 

Registration No. 09-10093 

Balance sheet Date 31/03/2011 

II 

Capital Raised during the year 

(Amount in Rs. Thousands) 

Right Issue 

Bonus Issue 

Private Placement 

Nil 

Nil 

Nil 

III 

Position of Mobilisation and Deployment of Funds 


Total Liabilities 96,624 

Total Assets 96,624 

Sources of Funds 

Paid-up Capital 92,624 

Reserves & Surplus 4,000 

Secured Loans - 

Unsecured Loans - 

Deferred Tax Liability - 

Applications of Funds 

Net Fixed Assets 2,844 

Intangible Assets - 

Investments 15,000 

Net Current Assets 40,513 

Miscellaneous Expenditure - 

Accumulated Losses 22,306 

Deferred Tax Asset 1,837 

IV 

Performance of Company 


Turnover 201,315 

Total Expenditure 201,315 

Profit/Loss Before Tax 7,823 

Profit/Loss After Tax (18,443) 

Earnings per share (in Rs.) (13.15) 

Dividend Rate (%) 

Nil 

Item Code No. (ITC Code) 

Product Description 

NA 

COMMODITY BROKING 

Place : Kochi Samson KJ Gaurav Vivek Soni 

Date : 09.05.2011 Managing Director Director 

- 24 -



DIRECTORS’ REPORT 

Your Directors have great pleasure in presenting the eleventh annual report together with the audited statement of accounts 

of your Company for the year ended 31 st March, 2011. 

1. Operations & Financial Results 

Particulars 

Total Revenue 7,182,459 14,625,366 

Total Expenditure 7,638,897 15,703,708 

Profit/(Loss)Before Tax & prior period expenses (456,438) (1,078,342) 

Prior Period Items Nil Nil 

Provision For Taxes/(Deferred tax benefit and FBT) Nil Nil 

Profit /(Loss) After Tax (456,438) (1,078,342) 

Balance in Profit & Loss Account Brought Forward (49,328,653) (48,250,311) 

Balance in Profit & loss A/c carried forward (49,785,091) (49,328,653) 

During the year the Company has recorded revenue of Rs 71.82 lakhs as against Rs 146.25 lakhs in the previous year. 

The expenditure during the period was Rs 76.38 lakhs which has resulted in a loss of Rs 4.56 lakhs as against 10.78 

lakhs during the previous year. The Company is rapidly expanding the insurance broking business and has a vision to 

be a leader in south India for distributing life and general insurance products. 

2. Directors 

During the year, Board has appointed Mr. Vijayakumaran V K, Principal Officer Cum CEO of the Company as its Manager 

w.e.f 25.05.2010 on a remuneration of not exceeding Rs 4 lakhs per annum, including bonus payable, if any, Subject to 

the approval of the shareholders in the ensuing Annual General Meeting by way of special resolution 

Mr Srirama Chandran.N, Director, has resigned from the Board of the Company w.e.f 31.03.2011.Board has appointed 

Mr Syam Kumar R as Additional Director by way of circular Resolution, w.e.f 01.04.2011. He will hold office only up to the 

conclusion of the ensuing Annual General Meeting. Company has received nomination from a member pursuant to Sec 

257 of the Companies Act 1956 proposing the candidature of Mr Syam Kumar R along with the requisite deposit. Board 

recommends his appointment in the ensuing AGM. 

Mr. Sanjeev Kumar G, Director, would be liable to retire by rotation at the forthcoming Annual General Meeting and being 

eligible offers himself for reappointment. 

3. Compliance to IRDA Regulations 

During the year under review the Company has complied with all the provisions of IRDA Regulations. 

4. Directors’ Responsibility Statement 

In accordance with the provisions of Section 217 (2AA) of the Companies Act, 1956, the Board of Directors affirm 

(a) That in the preparation of the Accounts for the year ending March 31, 2011 the applicable Accounting Standards 

were followed and there are no material departures therefrom. 

(b) That the accounting policies have been selected and applied consistently and have made judgments and estimates 

that were reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as on 

March 31, 2011 and of the loss of the Company for the year ended on that date. 

(c) That proper and sufficient care was taken for the maintenance of adequate accounting records in accordance with 

the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and 

other irregularities. 

(d) That the accounts for the year ended March 31, 2011 were prepared on a going concern basis. 

5. Auditors 

M/s BSR & Associates, KPMG House, No 10, Mahatma Gandhi Road, Nungambakkam, Chennai- 600034, were appointed 

as the statutory auditors for the financial year 2010-11. Board recommended their reappointment as Company’s statutory 

auditors for the financial year 2011-12. 

- 25 - 

Amount in Rs. 

2010-11 2009-10



6. Information under Sec 217(1) (e) of the Companies Act 1956 

In terms of Section 217(1) (e) of the Companies Act, 1956 (as amended) and the Companies (Disclosure of particulars 

in Report of Directors) Rules, 1988, your Directors furnish hereunder the additional information as required: 

A. Conservation of Energy – All possible steps are being taken at the design and implementation for reducing the 

consumption of energy to the maximum possible extent. 

B. Technology Absorption – NIL. 

C. Foreign Exchange Earnings and outgo - NIL. 

7. Particulars of Employees 

Your company did not have any employee who attracts the provisions of section 212(2A) of the Companies Act, 1956 as 

amended by the Companies (Amendment) Act, 1988. 

8. Comments in CARO 2003 

Auditors have in their report under CARO 2003 commented that the Company has incurred accumulated losses at the 

end of the financial year which has exceeded fifty per cent of its net worth. It has not incurred cash losses in the financial 

year but had incurred cash losses in the immediately preceding financial year. 

9. Response by Management 

Board has noted the same and is taking adequate steps to improve the net worth position of the Company. 

10. Acknowledgement 

The directors place on record their appreciation for the support and services rendered by the shareholders, bankers, 

Insurance partners and the employees of the company. 

For and on behalf of the Board 

Place : Cochin Gaurav Vivek Soni Sanjeev Kumar G 

Date : 09.05.2011 DIRECTOR DIRECTOR 

- 26 -



Auditors’ report to the members of 


We have audited the attached balance sheet of JRG Insurance Broking Private Limited (“the Company”) as at 31 March 2011, 

the profit and loss account and also the cash flow statement 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 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 (‘the Order’) as amended, 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: 

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, the profit and loss account and the cash flow statement dealt with by this report are in agreement with 

the books of account; 

d) in our opinion, the balance sheet, profit and loss account and the cash flow statement dealt with by this report comply with 

the accounting standards referred to in sub-section (3C) of Section 211 of the Companies Act, 1956. 

e) on the basis of written representations received from the directors, as at 31 March 2011 and taken on record by the Board 

of Directors, we report that none of the directors is disqualified as on 31 March 2011 from being appointed as director in 

terms of clause (g) of sub-section (1) of Section 274 of the Companies Act, 1956 ; and 

(f) 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 Act 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 31 March 2011; and 

(ii) in the case of the profit and loss account, of the loss of the Company for the year ended on that date. 

(iii) in the case of the cash flow statement, of the cash flows of the Company for the year ended on that date. 




S Sethuraman 

Partner 


Chennai 


- 27 -



Annexure to the Auditors’ Report 

(Referred to our report of even date) 

(i) (a) The Company has maintained proper records showing full particulars, including quantitative 

details and situation of fixed assets. 

(b) The Company has a regular programme of physical verification of its fixed assets by which all fixed assets are 

verified in a phased manner over a period of two years. In our opinion, this periodicity of physical verification is 

reasonable having regard to the size of the Company and the nature of its assets. In accordance with this programme 

certain fixed assets were verified during the year and no material discrepancies were noticed on such verification. 

(c) Fixed assets disposed of during the year were not substantial, and therefore, do not affect the going concern 

assumption. 

(ii) The Company is a service company, primarily rendering services relating to direct insurance broker. Accordingly it does 

not hold any physical inventories. Thus, paragraph 4(ii) of the Order is not applicable. 

(iii) The Company has neither granted nor taken any loans, secured or unsecured, to or from companies, firms or other 

parties covered in the register maintained under section 301 of the Companies Act, 1956. 

(iv) In our opinion and according to the information and explanations given to us, and having regard to the explanation that 

the services rendered are for the specialised requirements of the buyers and suitable alternative sources are not 

available to obtain comparable quotations there is an adequate internal control system commensurate with the size of 

the Company and the nature of its business with regard with regard to the purchase of fixed assets and sale of services. 

We have not observed any major weakness in the internal control system during the course of the audit. The activities of 

the Company do not involve purchase of inventory and sale of goods. 

(v) In our opinion, and according to the information and explanations given to us, there are no contracts and arrangements 

the particulars of which need to be entered into the register maintained under section 301 of the Companies Act, 1956. 

(vi) The Company has not accepted any deposits from the public. 

(vii) In our opinion, the Company has an internal audit system commensurate with the size and nature of its business. 

(viii) The Central Government has not prescribed the maintenance of cost records under section 209(1)(d) of the Companies 

Act, 1956 for any of the services rendered by the Company. 

(ix) a) According to the information and explanations given to us and on the basis of our examination of the records of 

the Company, amounts deducted/accrued in the books of account in respect of undisputed statutory dues including, 

Income-tax, Service tax, Provident fund, Employees’ State Insurance and other material statutory dues have 

generally been regularly deposited during the year by the Company with the appropriate authorities. As explained 

to us, the Company did not have any dues on account of Customs duty, Investor Education and Protection Fund, 

Sales tax, Excise duty and Wealth tax. There were no dues on account of cess under section 441A of the Companies 

Act, 1956 since the aforesaid section has not yet been made effective by the Central Government. 

According to the information and explanations given to us, no undisputed amounts payable in respect of Provident 

Fund, Employees’ State Insurance, Income tax, Service tax and other material statutory dues were in arrears as at 

31 March 2011 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 Income tax, Sales tax, Wealth tax, 

Service tax, Customs duty, Excise duty and Cess which have not been deposited with the appropriate authorities 

on account of any dispute except for the following . 

Name of the Nature of Amount Financial year to which Forum where 

statute the dues (Rs.) the amount relates dispute is pending 

Income Tax 

Commissioner 

Act, 1961 Income tax 1,165,290 2007-2008 (Appeals) 

(x) 

(xi) 

(xii) 

The Company has incurred accumulated losses at the end of the financial year which has exceeded fifty per cent of its 

net worth. It has not incurred cash losses in the current financial year and in the immediately preceding financial year. 

The Company did not have any outstanding dues to any financial institution, banks or debenture holders during the 

period. 

The Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures 

and other securities. 

- 28 -



(xiii) In our opinion and according to the information and explanations given to us, the Company is not a chit fund or a nidhi 

/ mutual benefit fund/society. 

(xiv) In our opinion and according to the information and explanations given to us, the Company is not dealing or trading in 

shares, securities, debentures or other instruments. 

(xv) In our opinion and according to the information and explanations given to us, the Company has not given any guarantee 

for loans taken by others from banks or financial institutions. 

(xvi) The Company did not have any term loans outstanding during the year. 

(xvii) According to the information and explanations given to us and on an overall examination of the balance sheet of the 

Company, we are of the opinion that there have been no funds raised on a short-term basis that has been used for long 

term investment by the Company. 

(xviii)The Company has not made any preferential allotment of shares to companies covered in the register maintained under 

Section 301 of the Companies Act, 1956. 

(xix) The Company did not have any outstanding debentures during the year. 

(xx) The Company has not raised any money by public issue. 

(xxi) According to the information and explanations given to us, no fraud on or by the Company has been noticed or reported 

during the course of our audit. 




S Sethuraman 

Partner 


Chennai 


- 29 -



BALANCE SHEET 


Schedule As at As at 


SOURCES OF FUNDS 

Shareholders’ funds 

Share capital 1 65,000,000 65,000,000 

Loan funds 

Unsecured loan from JRG Wealth Management Limited - 983,575 

65,000,000 65,983,575 

APPLICATION OF FUNDS 

FIXED ASSETS 

Gross Block 2 10,407,747 10,417,872 

Less: Accumulated depreciation / amortization 5,537,390 3,861,711 

Net Block 4,870,357 6,556,161 

Current assets, loans and advances 

Sundry debtors 3 957,938 1,372,389 

Cash and bank balances 4 3,858,489 1,523,930 

Loans and advances 5 6,518,320 8,268,085 

11,334,747 11,164,404 

Less: Current liabilities 6 884,349 938,669 

Provisions 7 105,846 126,974 

990,195 1,065,643 

NET CURRENT ASSETS 10,344,552 10,098,761 

Debit balance in profit and loss account 49,785,091 49,328,653 

65,000,000 65,983,575 









S Sethuraman Gaurav Vivek Soni Sanjeev Kumar G Meera C 

Partner Director Director Company Secretary 



Place : Kochi 


- 30 -



PROFIT AND LOSS ACCOUNT 




INCOME 

Income from Insurance broking 6,886,995 14,550,366 

Other income 8 295,464 75,000 

EXPENDITURE 

7,182,459 14,625,366 

Personnel costs 9 4,272,836 8,501,975 

Operating and other expenses 10 1,686,077 5,442,842 

Depreciation / Amortization 2 1,679,984 1,758,891 

7,638,897 15,703,708 

Loss before tax for the year (456,438) (1,078,342) 

Provision for tax - - 

Loss after tax for the year (456,438) (1,078,342) 

Balance in profit and loss account brought forward (49,328,653) (48,250,311) 

Balance in profit and loss account carried forward (49,785,091) (49,328,653) 

Earnings per share: 

Basic and diluted (0.07) (0.17) 

Weighted average number of equity 6,500,000 6,500,000 

shares outstanding during the year 

Nominal value of equity shares (Rs) 10 10 

Significant accounting policies and 

notes to the financial statements 11 

The schedules referred to above and the notes 

thereon form an integral part of the financial statements 











Place : Kochi 


- 31 -



Schedule 1 



As at 

As at 


Share capital 

Authorised capital 

10,000,000 ( Previous year: 10,000,000 ) equity shares of Rs 10 each 100,000,000 100,000,000 

Issued, subscribed and fully paid-up 

6,500,000 ( Previous Year: 6,500,000 ) equity shares of Rs 10 each fully paid up 65,000,000 65,000,000 

Of the above paid up equity shares 6,499,999 ( Previous year: 6,499,999 ) 

shares are held by the holding Company JRG Wealth Management Limited 65,000,000 65,000,000 

Schedule 3 

Sundry debtors ( unsecured ) 


- Considered good 54,266 58,040 

- Considered doubtful 937,885 541,720 

Other debts 

- Considered good 903,672 1,314,349 

1,895,823 1,914,109 

Less: Provision for doubtful debts (937,885) (541,720) 

957,938 1,372,389 

Schedule 4 

Cash and bank balances 

Cash in hand 2,334 13,390 

Balances with scheduled banks 

in current account 2,856,155 510,540 

in deposit account* 1,000,000 1,000,000 

3,858,489 1,523,930 

* Fixed deposit placed with bankers, represents 20% of initial share capital 

Schedule 5 

Loans and advances 

(Unsecured and considered good) 

Prepaid insurance 66,277 74,163 

Security deposit 163,500 945,500 

Interest accrued 12,500 12,500 

Advances recoverable in cash or in kind or for value to be received 33,426 - 

Advance tax ( net of provision ) 6,242,617 7,235,922 

(Unsecured and considered doubtful) 

Security deposit 210,178 210,178 

Less: Provision for doubtful loans and advances (210,178) (210,178) 

6,518,320 8,268,085 

- 32 -



Schedule 6 



As at 

As at 


Current liabilities 

Sundry creditors 

- Micro enterprises and small enterprises * - - 

- Others 9,984 - 

Accrued expenses 828,945 733,163 

Other liabilities 45,420 205,506 

884,349 938,669 

* (Refer note C(j) of Schedule 11) 

Schedule 7 

Provisions 

Provision for gratuity 105,846 126,974 

105,846 126,974 

Schedule 8 

Other Income 

Interest income from fixed deposits 

( Tax deducted at source Rs: 7,725 , Previous year 7,725 ) 75,000 75,000 

Interest received on income tax refund 214,511 - 

Provision no longer required written back 5,953 - 

295,464 75,000 

Schedule 9 

Personnel costs 

Salaries, wages and bonus 4,152,993 8,203,507 

Contributions to provident and other funds 119,843 290,068 

Staff welfare expenses - 8,400 

4,272,836 8,501,975 

Schedule 10 

Operating and other expenses 

Repairs and maintenance 11,000 59,964 

Rent 329,160 760,995 

Rates and taxes 1,000 9,500 

Printing and stationery 13,942 29,426 

Insurance 93,975 93,015 

Electricity charges 9,600 102,415 

Communication costs 49,714 279,053 

Traveling and conveyance 196,611 650,755 

Legal and professional expenses 241,250 1,849,006 

Office expenses 42,350 146,648 

Business promotion - 4,900 

Loss on sale of fixed assets (net) 4,320 446,841 

Provision for doubtful advances - 107,195 


Miscellaneous expenses 296,990 361,409 

1,686,077 5,442,842 

- 33 -



Schedule 2 - Fixed assets 



Particulars 

As at 


Gross block Depreciation /Amortization Net block 

Additions Deletions 

As at 

31 March 2011 

As at 


For the Year On deletions 

As at 

31 March 2011 

As at 

31 March 2011 

As at 


Tangible assets 

Computers 4,652,591 - - 4,652,591 2,117,875 672,114 - 2,789,989 1,862,602 2,534,716 

Electrical fittings 323,942 - - 323,942 109,726 53,554 - 163,280 160,662 214,216 

Office Equipments 1,095,421 - - 1,095,421 330,832 191,305 - 522,137 573,284 764,589 

Furniture and fittings 4,110,222 - 10,125 4,100,097 1,234,041 715,872 4,305 1,945,608 2,154,489 2,876,181 

Intangible assets 

Computer software 235,696 - - 235,696 69,237 47,139 - 116,376 119,320 166,459 

Total 10,417,872 - 10,125 10,407,747 3,861,711 1,679,984 4,305 5,537,390 4,870,357 6,556,161 

Previous year 10,749,057 194,255 525,440 10,417,872 2,168,619 1,758,891 65,799 3,861,711 6,556,161 

- 34 -



CASH FLOW STATEMENT 




Cash flow from operating activities 

Net (loss) before tax (456,438) (1,078,342) 


Depreciation /Amortization 1,679,984 1,758,891 

Provision for doubtful loans and advances - 107,195 


Loss on sale of assets ( net ) 4,320 446,841 

Interest income (289,511) (75,000) 

Operating profit / (loss) before working capital changes 1,334,520 1,701,305 


Decrease in sundry debtors 414,451 53,056 

(Increase) / decrease in loans and advances 1,353,600 (2,169,404) 

(Decrease) in current liabilities and provisions (75,448) (1,240,384) 

Cash generated / (used ) from operations 1,692,603 (3,356,732) 

Net cash generated / (used ) from operating activities ( A ) 3,027,123 (1,655,427) 

Cash flow from investing activities 

Purchase of fixed assets - (194,255) 

Proceed from sale of fixed assets 1,500 12,800 

Net cash generated / (used ) from investing activities ( B ) 1,500 (181,455) 

Cash flow from financing activities 

Increase / ( decrease ) in loan taken from parent company (983,575) 983,575 

Interest income 289,511 75,000 

Net cash generated / (used ) from financing activities ( C ) (694,064) 1,058,575 

Net increase / (decrease) in cash and cash equivalents (A+B+C) 2,334,559 (778,307) 

Cash and cash equivalents at the beginning of the year 1,523,930 2,302,237 

Cash and cash equivalents at the end of the year 4 3,858,489 1,523,930 

Significant accounting policies and 

notes to the financial statements 11 

The schedules referred to above and the notes 

thereon form an integral part of the financial statements 











Place : Kochi 


- 35 -





11. (A) Background 

JRG Insurance Broking Private Limited (“JRG Insurance” or “the Company”) was incorporated on 22 February 2000. The 

Company is a subsidiary of JRG Wealth Management Limited (“parent company”) and is primarily engaged in the 

business of direct insurance broking. 

11 (B) Significant Accounting Policies 

a. Basis of preparation of financial statements 

The financial statements of the Company have been prepared and presented in accordance with Indian Generally 

Accepted Accounting Principles (GAAP) under the historical cost convention on the accrual basis. GAAP comprises 

accounting standards notified by the Central Government of India under Section 211 (3C) of the Companies Act, 

1956, other pronouncements of Institute of Chartered Accountants of India and the provisions of Companies Act. 

The Company has accumulated losses amounting to Rs. 49,785,091 as at 31 March 2011, resulting in significant 

erosion of its net worth. The Company has received a commitment for financial and operational support from its 

principal shareholders as may be required to enable it to establish profitable operations in the future. Accordingly, 

the Board of Directors considers that it is appropriate to prepare these financial statements on the going concern 

basis. 

b. Use of estimates 

The preparation of financial statements in conformity with generally accepted accounting principles (GAAP) requires 

management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the 

disclosure of contingent liabilities on the date of the financial statements and reported amounts of income and 

expenses during the period. Actual figures may differ from these estimates. Any revision to accounting estimates is 

recognized prospectively in current and future periods. 

c. Fixed assets and depreciation 

Fixed Assets are carried at cost of acquisition or construction less accumulated depreciation and impairment, if 

any. Cost comprises the purchase price and any attributable cost of bringing the asset to its working condition for 

its intended use. 

Depreciation on fixed assets is provided on Straight Line method. The rates of depreciation prescribed in Schedule 

XIV to the Companies Act, 1956 are considered as the minimum rates. If the management’s estimate of the useful 

life of a fixed asset at the time of acquisition of the asset or of the remaining useful life on a subsequent review is 

shorter than that envisaged in the aforesaid schedule, depreciation is provided at a higher rate based on the 

management’s estimate of the useful life/remaining useful life. The rates of depreciation followed by the Company 

are as follows: 

Asset group Depreciation rates (%) 

Furniture and fittings 20.00% 

Electrical fittings 20.00% 

Office equipments 20.00% 

Computers 16.21% 

Softwares 20.00% 

Individual assets costing Rs 5,000/- or less are depreciated at 100% in the year of purchase. 

d. Impairment of Assets 

The Company assesses at each balance sheet date whether there is any indication that an asset may be impaired. 

If any such indication exists, the Company estimates the recoverable amount (higher of net realizable value and 

value in use) of the asset. If such recoverable amount of the asset or the recoverable amount of the cash generating 

unit to which the asset belongs is less than the carrying amount, the carrying amount is reduced to its recoverable 

amount. The reduction is treated as an impairment loss and is recognized in the profit and loss account. If at the 

balance sheet date there is an indication that a previously assessed impairment loss no longer exists, the recoverable 

amount is reassessed and the asset is reflected at the recoverable amount subject to a maximum of depreciable 

historical cost. 

- 36 -





e. Revenue 

Brokerage income is recognised on accrual basis at the inception of the insurance policy based on the terms 

agreed with the insurance companies. Broking income on renewed policy is recognized on the date on which 

insurance premium is received from the Insurance company. 

Interest income is recognised on time proportion basis. 

f. Operating Lease 

Operating lease payments are recognized as an expense in the profit and loss account on a straight line basis over 

the lease term. 

g. Taxation 

Income-tax expense comprise current tax (i.e. amount of tax for the period determined in accordance with the 

income-tax law), and deferred tax charge or credit (reflecting that tax effects of timing differences between accounting 

income and taxable income for the period). The deferred tax charge or credit and the corresponding deferred tax 

liabilities or assets are recognized using the tax rates and tax laws that have been enacted or substantively 

enacted by the balance sheet date. Deferred tax assets are recognized only to the extent there is a reasonable 

certainty that the assets can be realized in future; however, where there is unabsorbed depreciation or carried 

forward loss under taxation laws, deferred tax assets are recognized only if there is a virtual certainty of realization 

of such assets. Deferred tax assets are reviewed as at the balance sheet date and written down or written up to 

reflect the amount that is reasonably/virtually certain (as the case may be) to be realized. Current tax and deferred 

tax assets and liabilities are offset to the extent to which the Company has a legally enforceable right to set off and 

they relate to taxes on income levied by the same governing taxation laws. 

h. Provisions, contingent liabilities and contingent assets 

The Company creates a provision when there is present obligation as a result of past event that probably requires 

an outflow of resources and a reliable estimate can be made of the amount of the obligation. A disclosure for a 

contingent liability is made when there is a possible obligation or a present obligation that may, but probably will 

not, require an outflow of resources. Where there is a possible obligation or a present obligation in respect of which 

the likelihood of outflow of resources is remote, no provision or disclosure is made. Contingent assets are neither 

recognised nor disclosed in the financial statements. 

i. Employee benefits 

I. Short term employee benefit plans 

All short term employee benefit plans such as salaries, wages, bonus, special awards and, medical benefits 

which fall due within 12 months of the period in which the employee renders the related services which 

entitles him to avail such benefits are recognized on an undiscounted basis and charged to the profit and loss 

account. 

II. Defined Contribution Plan 

Contributions to the provident funds are made monthly at a predetermined rate to the Regional Provident 

Fund Commissioner and debited to the profit and loss account on an accrual basis. 

III. Defined Benefit Plan 

Provision is made for gratuity based on actuarial valuation, carried out by an independent actuary as at the 

balance sheet date using the projected unit credit method. 

j. Earnings per share 

Basic earnings per share is computed by dividing net profit or loss for the period attributable to equity shareholders 

by the weighted average number of shares outstanding during the year. Diluted earnings per share amounts are 

computed after adjusting the effects of all dilutive potential equity shares. The number of shares used in computing 

diluted earnings per share comprises the weighted average number of shares considered for deriving basic 

earnings per share, and also the weighted average number of equity shares, which could have been issued on the 

conversion of all dilutive potential shares. In computing dilutive earnings per share, only potential equity shares 

that are dilutive and that decrease profit per share are included. 

- 37 -





k. Cash flows 

Cash flows are reported using the indirect method, whereby profit before tax is adjusted for the effects of transactions 

of a non–cash nature and any deferrals or accruals of past or future cash receipts or payments. The cash flows from 

regular revenue generating, financing and investing activities of the Company are segregated. 

11. (C) Notes to the financial statements 

a. Capital commitments and contingencies : Nil ( Previous year : Nil ) 

b. Auditor’s remuneration ( included in legal and professional expenses ) 

Particulars Year ended 31 March 2011 Year ended 31 March 2010 

Statutory audit 150,000 150,000 

Tax audit 25,000 25,000 

Out of pocket expenses 7,500 46,790 

Total * 182,500 221,790 

*excludes service tax 

c. Deferred Taxes 

The Company has not recognized the net deferred tax asset in respect of unabsorbed depreciation or carried 

forward loss under taxation laws as the management feels that there exists no virtual certainty in relation to its 

realization as on the balance sheet date. 

d. Segment reporting 

a) Primary Segment Information (by Business Segments) 

The Company is engaged in the business of direct insurance broking. Thus, it operates in a single primary 

segment. 

b) Secondary Segment Reporting (by Geographical Segments) 

The Company only caters to the needs of the domestic market. Hence there are no reportable geographical 

segments. 

e. Managerial remuneration 

Remuneration to directors Year ended 31 March 2011 Year ended 31 March 2010 

Salaries and allowances* 503,937 1,701,000 

503,937 1,701,000 

* The managerial persons are covered under the Company’s group gratuity scheme along with other employees 

of the Company. Contribution to gratuity is based on actuarial valuation done on an overall Company basis and 

hence is excluded above. 

f. Related party disclosures. 

Names of related parties and nature of relationship: 

Ultimate holding company 

JRG Securities Limited 

Holding company 


Key management personnel Ranjit Kumar G (resigned as a whole time director w.e.f.15 May 2010) 

Vijayakumaran VK (appointed as a manager w.e.f. 24 May 2010) 

- 38 -





Transactions and balance with related parties 

Particulars 

Transaction during year 

ended 31 March 2011 

Amount outstanding 

as at 31 March 2011 

Equity contribution from parent company - 64,999,990 

Loan taken /(repaid) to parent company ( net) (983,575) - 

Reimbursement of expenses to parent company (net) 88,092 - 

Remuneration to key management personnel 

Salaries and other allowances 

Ranjith Kumar G 196,692 - 

Vijayakumaran VK 307,245 - 

Particulars 

Transaction during year 

ended 31 March 2010 

Amount outstanding 

as at 31 March 2010 

Equity contribution from parent company - 64,999,990 

Loan taken /(repaid) to parent company (net) 983,575 983,575 

Reimbursement of expenses to parent company (net) 83,575 - 

Remuneration to key management personnel 

Salaries and other allowances 

Ranjith Kumar G 1,701,000 - 

- 39 -





g. Employee benefit 

The following table set out the status of the gratuity plan as required under AS 15 (Revised 2005) and the 

reconciliation of opening and closing balances of the present value of the defined benefit obligation: 

Particulars 

Year ended 

31 March 2011 

Year ended 


Change in present value of obligations 

Obligations at beginning of the year 126,974 111,029 


Interest cost 10,793 9,437 


Benefits paid - - 

Obligations at the end of the year 105,846 126,974 

Change in Plan assets 

Fair value of plan assets at beginning of the year - - 

Fair value of plan assets at end of the year - - 

Actual return on plan assets - - 

Reconciliation of present value of the obligation 

and the fair value of plan assets 

Present value of the defined benefit obligation at the end of the year 105,846 126,974 

Fair value of plan assets at the end of the year - - 

Amount of liability recognized in the balance sheet 105,846 126,974 

Gratuity cost for the year 


Interest cost 10,793 9,437 

Expected return on plan assets - - 


Net gratuity cost (included in personal cost - Schedule 9) (21,128) 15,945 

Assumptions 

Discount Rate 8.50% 8.50% 

Rate of growth in salary levels 7.50% 7.50% 

- 40 -





h. Quantitative Particulars 

As the Company is engaged in service activity, provision of information relating to quantitative details of sales and 

certain information as required under paragraphs 3, 4C and 4D of part II of Schedule VI to the Companies Act, 1956 

are not applicable. 

i. Foreign Currency Forward Contracts 

The Company has no receivable and payable in foreign currency as at the balance sheet date. Hence the Company 

has not entered into any foreign currency forward contract to hedge its risk associated with foreign currency 

fluctuations. 

j. Micro, Small and Medium Enterprises Development Act, 2006 

The management has identified enterprises which have provided goods and services to the Company and which 

qualify under the definition of “Micro and Small Enterprises” as defined under Micro, Small and Medium Enterprises 

Development Act, 2006 (“the Act”). Accordingly, the disclosure in respect of the amounts payable to such enterprises 

as at 31 March 2011 has been made in the financial statements based on the information received and available 

with the Company. There are no overdue amounts payable to such enterprises as at 31 March 2011. 

k. Prior year comparatives 

Prior year figures have been reclassified / regrouped wherever necessary to conform to the current year’s 

classification. 










Place : Kochi 


- 41 -



BALANCE SHEET ABSTRACT & GENERAL BUSINESS PROFILE 

I. Registration Details 

Registration No. 09-13701 

Balance sheet Date 3/31/2011 

II. 

Capital Raised during the year 


Right Issue 

Bonus Issue 

Private Placement 

Nil 

Nil 

Nil 

III. 

Position of Mobilisation and Deployment of Funds 


Total Liabilities 65,000 

Total Assets 65,000 

Sources of Funds 

Paid-up Capital 65,000 

Reserves & Surplus - 

Secured Loans - 

Unsecured Loans - 

Deferred Tax Liability - 

Applications of Funds 

Net Fixed Assets 4,870 

Intangible Assets - 

Investments - 

Net Current Assets 990 

Miscellaneous Expenditure 

Accumulated Losses 49,785 

IV. 

Performance of Company 

Turnover 7,182 

Total Expenditure 7,639 

Profit/Loss Before Tax -457 

Profit/Loss After Tax -457 

Earnings per share (in Rs.) -0.07 

Dividend Rate (%) 

Nil 

Item Code No. (ITC Code) 

Product Description 

NA 

INSURANCE 

Place : Kochi Gaurav Vivek Soni Sanjeev Kumar G Meera C 

Date : 09.05.2011 Director Director Company Secretary 

- 42 -

ATTENDANCE SLIP 


Regd. Office: 1st Floor, MES Building, Kaloor, Kochi - 682 017 

Corporate Office: JRG House, Ashoka Road, Kaloor, Kochi - 682 017, Kerala 

Tel: 0484 2409900, Fax: 2409922, E-mail: jrg@jrg.co.in 

Name and Address of the Member and / or Proxy 

Reg. Folio No. : 

No. of Shares Held : 

I hereby record my presence at the FIFTEENTH ANNUAL GENERAL MEETING of the Company being 

held at the Corporate Office of the Company at ‘JRG House’, Ashoka Road, Kaloor, Cochin -682017 on 

Wednesday, the 28th day of September 2011 at 3 p m hrs. 

Member’s / Proxy’s Signature : 

Please fill in the attendance slip and hand over the attendance of the meeting hall. Please bring your 

copy of the Annual report for reference at the meeting. 

PROXY FORM 


Regd. Office: 1st Floor, MES Building, Kaloor, Kochi - 682 017 

Corporate Office: JRG House, Ashoka Road, Kaloor, Kochi - 682 017, Kerala 

Tel: 0484 2409900, Fax: 2409922, E-mail: jrg@jrg.co.in 

Reg. Folio No. : 

No. of Shares Held : 

I/We ................................................................................................................................................................................... 

of .......................................... being a member/members of JRG Wealth Management Ltd. hereby 

appoint ............................................................................................................................................................................... 

of ......................................................... or failing him ................................................ of ................................................. 

as my / our proxy to vote for me / us and on my / our behalf at the Annual General Meeting of the company to 

be held on 28th September 2011 and at any adjournment thereof. 

Signed this ...................................... day of .................................. 2011 

Signature(s) of the Shareholder(s) 

Affix 

Rupee 1 

Revenue 

Stamp 

Note: This form duly completed and signed must be deposited at the Registered Office of the Company not less than 

48 hours before the time for holding the aforesaid meeting.

Wealth Management 10-11.pmd - inditrade

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