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HOV Services
BSE: 532761|NSE: HOVS|ISIN: INE596H01014|SECTOR: Computers - Software Medium/Small
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« Dec 11
Notes to Accounts Year End : Dec '12
a) Rights of Equity Shareholders
 
 The Company has only one class of equity shares having a par value of
 Rs. 10 each. Each shareholder has right to vote in respect of such
 share, on every resolution placed before the Company and his voting
 right on a poll shall be in proportion to his share of the paid -up
 equity capital of the Company. In the event of liquidation, the equity
 shareholders are entitled to receive the remaining assets of the
 Company after payments to preferential amounts secured and unsecured
 creditors, if any, in proportion to their shareholding.
 
 b) Shares reserved for issue under options:
 
 a.  Employees Stock Option Plan (Plan 2007):
 
 The shareholders in its Nineteenth Annual General meeting held on July
 21, 2007 had approved to issue 1,100,000 equity shares of a face value
 of Rs.10 each with each such option conferring a right upon the
 employee to opt for one equity share of the company, in terms of HOVS
 ESOP Plan 2007.  Under the plan, 400,000 options were reserved for
 employees of the Company and 700,000 for employees of subsidiary
 companies. Options were issued to employees at an exercise price not
 less than closing price of the stock exchange where there is highest
 trading volume, prior to the date of meeting of the Compensation &
 Remuneration Committee in which options are granted. The options will
 vest in a phased manner within five years as 10% in each first to four
 years and balance 60% at the end of fifth year.
 
 b. Employees Stock Option Plan (Plan 2008):
 
 The shareholders in its Twentieth Annual General meeting held on
 September 30, 2008 approved additional 750,000 equity shares of a face
 value of Rs.10 each with each such option conferring a right upon the
 employee to opt for one equity share of the Company, in terms of HOVS
 ESOP Plan 2008.  Under the 2008 plan, 750,000 options were reserved for
 employees of the subsidiary companies of the Company, working in India
 or out of India.
 
 Options were issued to employees at an exercise price not less than
 closing price of the stock exchange where there is highest trading
 volume, prior to the date of meeting of the Compensation & Remuneration
 Committee in which options are granted. The options will vest in a
 phased manner within five years as 10% in each first to four years and
 balance 60% at the end of fifth year. No options are granted under ESOP
 Plan 2008.
 
 1.1. Contingent Liabilities and Commitment:
 
 a) Contingent Liabilities not provided for in respect of: 
 
                                                  (Amount in Rs.)
 
 Sr. 
 No.  Particulars                   As at             As at
                                    December 31, 2012 December 31, 2011
 
 (i)  Corporate Guarantees 
      outstanding in
      respect of loans taken by 
      an Associate*                      59,013,519       89,850,674
 
 (ii) Fixed Deposit Pledged for 
      issue of bank guarantee on 
      behalf of subsidiary company       56,000,000       32,200,000
 
 (iii) Disputed Excise Matter 
      (Service Tax),
       excluding interest, if any           Nil              557,079
 
 (iv) Disputed Income Tax Matter
     (including interest up to 
      date of demand)                     5,352,170        5,352,170
 
 * Since released
 
 b) Commitment:
 
 Operating Lease: The Company has acquired certain premises under lease
 arrangements which are renewable /cancellable at the Company''s and/or
 lessons'' option as mutually agreed. The future lease rental payments
 that the Company is committed to make in respect of these are as
 follows:
 
 1.2 a) In the opinion of the management assets other than fixed assets
 and non-current investments have a value on realisation in the ordinary
 course of business at least equal to the amount at which they are
 stated.
 
 b) The accounts of certain Trade Receivables, Trade Payables and Loans
 & Advances are however, subject to formal confirmations/reconciliations
 and consequent adjustments, if any. The management does not expect any
 material difference affecting the current period''s financial statements
 on such reconciliation/adjustments.
 
 1.3 Related Party Transactions
 
 Related party disclosures as required by AS-18 Related Party
 Disclosures are given below: A) Name of the related parties:
 
 a) The Parties where Control exists:
 
 (i) Subsidiaries
 
 *Upto April 29, 2011
 
 a) Related party relationship is as identified by the management and
 relied upon by the auditors.
 
 b) No amounts in respect of related parties have been written off/
 written back during the period, nor has any provision been made for
 doubtful debts/ receivable except as disclosed above.
 
 1.4 There are no Micro, Small and Medium Enterprises as defined in the
 Micro, Small, Medium Enterprises Development Act, 2006 to whom the
 Company owes dues on account of principal amount together with interest
 and accordingly, no additional disclosures have been made.
 
 1.5 As per Accounting Standard (AS) 17 Segment Reporting, segment
 information has been provided in the notes to Consolidated Financial
 Statements.
 
 1.6 Remittance in foreign currencies for dividends:
 
 The Company has remitted Rs. NIL (Previous Year Rs. 61,850,776) in
 foreign currency on account of dividends paid during the period. The
 particulars of dividend paid to nonresident shareholders during the
 period are as under:
 
 1.7 Merger of Indirect Subsidiary:
 
 The Board of Directors of the Company in their meeting held on March
 12, 2011 had given approval to combine its wholly owned subsidiary HOV
 Services LLC with CorpSource Finance Holdings, LLC. On April 29, 2011,
 the combination between CorpSource Finance Holdings LLC (its direct
 subsidiary) (now known as Source HOV LLC), together with its subsidiary
 SOURCECORP, Incorporated (SRCP), a Delaware corporation, and HOV
 Services, LLC (HOVS), a Nevada limited liability company was
 completed.
 
 Pursuant to service agreements entered into with the aforesaid combined
 entity, the rates for the services rendered by the Company have been
 revised impacting Profit of the Company.
 
 1.8 a) Current year figures are comprises of twelve months and with
 that of previous year comprises of nine months and hence not
 comparable.
 
 b) Figures of the previous year have been regrouped / rearranged,
 wherever considered necessary to conform to the current period''s
 presentation.
Source : Dion Global Solutions Limited
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