SENSEX NIFTY India | Notes to Account > Computers - Software Medium & Small > Notes to Account from HOV Services - BSE: 532761, NSE: HOVS

HOV Services

BSE: 532761|NSE: HOVS|ISIN: INE596H01014|SECTOR: Computers - Software Medium & Small
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« Mar 14
Notes to Accounts Year End : Mar '15
 1 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.
 2 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.
 3. Contingent Liabilities and Commitment:
 a) Contingent Liabilities not provided for in respect of:
 (i) Pending Litigations:                                (Amount in Rs)
 Sr.      Particulars                          As at March   As at March
 No.                                            31. 2015      31. 2014
 (i)      Disputed Income Tax Matters is in    10,259,390     10,259,390
          relation to the A.Y. 2007-08 and
          2009-10 and company has paid Rs.
          2,446,738 (Previous Year Rs.
          2,446,738) under protest (including
          interest upto the date of demand)
 The Company''s pending litigation is in respect of proceedings pending
 with Tax Authorities. The Company has reviewed all its pending
 litigations and proceedings and has made adequate provisions, wherever
 required and disclosed the contingent liabilities, wherever applicable,
 in its financial statements. The Company does not expect the outcome of
 these proceedings to have a material impact on its financial
 (ii) Other contingent liabilities:                    (Amount in Rs.)
 Sr. No.  Particulars                       As at March      As at March
                                            31, 2015         31, 2014
 (i)      Fixed Deposit pledged for         72,436,320       57,336,320
          issue of bank guarantee/loan
          on behalf of a step down
 (ii) Other bank guarantee                   216,000         216,000
 4. 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.
 5. The appointment and remuneration payable to all three whole time
 directors of the Company were approved by the shareholders in their
 23rd Annual General Meeting held on August 3, 2011. The Central
 Government approved the appointment for period of five years from April
 1, 2011 to March 31, 2016 but the remuneration payable approved was Rs.
 48 lacs per year for each whole time director for a period of three
 years from April 1, 2011 to March 31, 2014 vide letter dated October
 13, 2011. The Company filed an application on March 21, 2014 to the
 Central Government seeking approval to allow for the remuneration
 payable for remaining period of two years from April 1, 2014 to March
 31, 2016 to be Rs 48 lacs per year for each whole time director. The
 Ministry of Corporate Affairs directed the Company by a letter dated
 July 31, 2014 to comply with the provisions of the Companies Act, 2013,
 for payment of remuneration to whole time directors. During the current
 year, the Company has provided managerial remuneration of Rs. 96 lacs
 based on shareholders'' approval upto March 31, 2016. The requisite
 approval from the Shareholders and Central Government will be obtained
 for remaining period of 2 years from April 1, 2014 to March 31, 2016 of
 their term.
 6.  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.
 7.  As per Accounting Standard (AS) 17 Segment Reporting, segment
 information has been provided in the notes to Consolidated Financial
 8.  Pursuant to the Companies Act, 2013 (the Act) coming in to
 effect from April 1, 2014, the Company has realigned the remaining
 useful life of its fixed assets in accordance with the provisions
 prescribed under Schedule II to the Act. , Consequently in case of
 assets which have completed their useful life, the carrying value (net
 of residual value) as at April 1, 2014 amounting to Rs. 863,920 has
 been adjusted to Reserves.  Also, carrying value of the other assets
 (net of residual value) is being depreciated over the revised remaining
 useful lives. Consequently, the depreciation and amortization expense
 for the year ended March 31, 2015 is higher by Rs. 648,117 (net of
 deferred tax Rs. 311,274).
 9.  The Company has given advance of Rs. 17,820,038 (Previous year
 Rs. 16,348,659) to and pledged Fixed Deposit of Rs. 72,436,320
 (Previous year Rs. 57,336,320) for issue of bank guarantee/loan taken
 by HOV Environment Solutions Private Limited (a step down subsidiary).
 Which has accumulated losses far in excess of its paid up capital and
 reserves and surplus. The Company is hopeful at recovering/realising
 the same in due course of time in view of expected revival of
 activities/developments in the said subsidiary and therefore, no
 provision have been made.
 10. Loans given to, Investments made and pledged fixed deposits as
 guarantee for loan taken by the subsidiary covered under section 186(4)
 of the Companies Act, 2013 was utilised for business purpose.
 11. a) The current financial year comprises 12 months period ended
 March 31, 2015 as against previous financial year comprising of 15
 months period ending March 31, 2014 therefore, figures of the current
 year are not comparable with those of the previous period.
 b) Figures of the previous period have been regrouped / rearranged,
 wherever considered necessary to conform to the current year''s
Source : Dion Global Solutions Limited
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